The total amount of spending on nonresidential structures, equipment, software, residential structures, and business inventories in a given period of time is called:
A) net exports.
B) government consumption and investment.
C) gross private domestic investment.
D) personal consumption.
C
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If the budget deficit is $50 billion and the structural deficit is $10 billion, the cyclical deficit is
A) $10 billion. B) $60 billion. C) $50 billion. D) $40 billion. E) More information is need to answer the question.
In the bank lending channel, an important reason for output increases in the short run after an expansionary monetary policy is that
A) the funds directly available for households and firms to spend will increase. B) prices will increase, making increased production more profitable for firms. C) the increase in government spending from an expansionary monetary policy increases output through the multiplier effect. D) the ability of banks to make loans will increase.
The unemployment rate may underestimate the true extent of unemployment if: a. many part-time employees would like to work full-time, but are unable to get the additional work. b. employees increase the number of hours they work overtime
c. there are a large number of people working in the underground economy. d. any of the above occur.
Suppose that cookie producers create a positive externality equal to $2 per dozen. What is the relationship between the equilibrium quantity and the socially optimal quantity of cookies to be produced?
a. They are equal. b. The equilibrium quantity is greater than the socially optimal quantity. c. The equilibrium quantity is less than the socially optimal quantity. d. There is not enough information to answer the question.