If Ricardian equivalence holds, one way to get the expansionary effects of a tax cut to occur is:
A. pair it with reduced government spending.
B. pair it with increased government spending.
C. to run a campaign inspiring people to buy goods made in the United States.
D. None of these will create the expansionary effects of a tax cut.
D. None of these will create the expansionary effects of a tax cut.
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What three real-world complications keep purchasing power parity from being a complete explanation of exchange rate fluctuations in the long run? Explain
What will be an ideal response?
Refer to Figure 3-5. In a free market such as that depicted above, a shortage is eliminated by
A) a price decrease, decreasing the supply and increasing the demand. B) a price increase, increasing the quantity supplied and decreasing the quantity demanded. C) a price increase, increasing the supply and decreasing the demand. D) a price decrease, decreasing the quantity supplied and increasing the quantity demanded.
Which of the following situations is an example of bank mismanagement?
a. Bank W decreasing its rate of interest below the rate set by the Fed to attract more borrowers b. Bank X charging high fees on the processing of loans and checks c. Bank Y refusing loans to all clients who have an asset value below 25,000 d. Bank Z providing loans only to large corporate houses with a high net worth
If the number of unemployed equals 125,000 and the number of employed equals 275,000, the labor-force participation rate
A. is 31.2%. B. is 68.8%. C. is 75%. D. cannot be determined from this information.