In a two-period model with production, a permanent increase in domestic government spending
A) increases domestic output and increases the current account surplus.
B) increases domestic output and decreases the current account surplus.
C) decreases domestic output and increases the current account surplus.
D) decreases domestic output and decreases the current account surplus.
A
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What will be an ideal response?
Each of the following conditions, except one, must be satisfied in a perfectly competitive labor market. Which is the exception?
a. There are a large number of buyers of labor services. b. Wages are the sole source of household income. c. There are no barriers to entering the market. d. There are a large number of sellers of labor services. e. All workers appear the same to buyers of labor services.
If the firm were a perfect competitor in the long run, how much would its output be?
Transfer payments are:
A. excluded when calculating GDP because they only reflect inflation. B. excluded when calculating GDP because they do not reflect current production. C. included when calculating GDP because they are a category of investment spending. D. included when calculating GDP because they increase the spending of recipients.