An increase in the U.S. national debt would be:
A. unsustainable if U.S. GDP grew at a faster rate than the debt.
B. unsustainable under any circumstances.
C. unsustainable if U.S. GDP grew at a slower rate than the debt.
D. sustainable under any circumstances.
Answer: C
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A person who works 25 hours per week: a. is considered to be a discouraged worker. b. is considered to be unemployed
c. is considered to part of the labor force. d. none of the above
If the United States unilaterally removed all of its trade restrictions and moved toward a policy of free trade, international trade theory indicates that
a. U.S. residents would gain, but people in other countries would be worse off. b. people in other countries would gain, but U.S. residents would be worse off. c. both U.S. residents and people in other countries would be able to achieve higher income levels. d. the average income level would be lower in both the United States and other countries.
The primary objective of economics is
A. to study how people make choices with limited resources. B. to study why some people are never happy with the resources they have. C. to learn how to create more resources. D. to learn how to make the most profits with a given amount of resources.
Classical economists would cite all of the following as reasons why the government cannot smooth out the business cycle except that
A. political constraints on policy actions prevent the government from carrying out effective policies. B. time lags between the onset of a recession and the implementation of effective countermeasures make anti-recessionary macroeconomic policies impractical. C. the government has imperfect knowledge of the economy. D. only productivity shocks can cause real fluctuations in the business cycle.