The cyclically adjusted surplus as a percentage of GDP is 1 percent in year 1. This surplus becomes a deficit of 2 percent of GDP in year 2. It can be concluded from year 1 to year 2 that:
A. the federal government is increasing its spending.
B. the federal government is decreasing taxes.
C. fiscal policy was contractionary.
D. fiscal policy was expansionary.
Answer: D
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If the demand for the Ford Mustang increases, we would expect Ford to
A) keep the price of Mustangs constant, regardless of the cost or benefit of a price change. B) increase the price of Mustangs to keep pace with the increase in demand. C) increase the price of Mustangs only if the benefit of a price increase outweighs the cost. D) decrease the price of Mustangs to maintain the increase in demand.
Which of the following explains the vicious circle of poverty?
a. By investing in education and infrastructure at the same time, the country can overcome the problems of poverty. b. Poverty arises out of the lack of investment, but they cannot invest because they are poor. c. A nation can shift its production possibilities curve inward by shifting more resources into the production of capital goods. d. A nation can shift its production possibilities curve outward by shifting more resources into the production of consumer goods.
In the United States from 1950 to 2000, it was most likely that an unemployed person would
A. be re-employed in less than 5 weeks. B. be re-employed in 5 to 14 weeks. C. be re-employed in 14 to 26 weeks. D. exit the labor force. E. be re-employed in more than 26 weeks.
If trade in a particular good interindustry, the expansion of an industry in one country is likely to lead to the ________ of that industry in the other country. If trade in that good is intraindustry, expansion of the industry in one country is likely to lead to the ________ in the other country
A) decline, decline B) decline, expansion C) expansion, decline D) expansion, expansion