The real balance effect (wealth effect), the interest rate effect, and the net exports effect all help to explain the:
A. decrease in supply in the loanable funds market.
B. large federal budget deficit.
C. increase in short-run aggregate supply.
D. downward-sloping aggregate demand curve.
Answer: D
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Goods that are used for the production of other goods are referred to as:
A) consumer durable goods. B) consumer capital. C) physical capital. D) public goods.
If the players in the figure shown act in their own self-interest, then we know that Adidas will earn:
A. $2 million.
B. $8 million.
C. $6 million.
D. $10 million.
Which of the following raise the incentive for households to save?
a. means-testing of government benefits and inheritance taxes b. means-testing of government benefits but not inheritance taxes c. inheritance taxes, but not means-testing of government benefits d. neither means-testing of government benefits nor inheritance taxes
If a $10 billion increase in government purchases causes a $25 billion increase in real GDP, then the expenditures multiplier is
A. unknown. B. 2.5. C. 10. D. 5.