Economics is most precisely defined as
A) a study of what people need to survive.
B) a study of how culture evolves in different geographic areas.
C) the same as the study of finance and management.
D) the study of how people make choices.
Ans: D) the study of how people make choices.
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If there are no interventions by finance ministers or control banks in the international market, then
A) the current account and the capital account must sum to zero. B) the current account will be greater than the capital market. C) the capital market will be greater than the current account. D) the capital market will equal the current account.
A production function shows
A. How total costs increase as labor is added. B. How a firm's costs of production increase as it produces more goods. C. How a firm's production changes as quantity of labor and other inputs changes. D. How production changes as its unit costs go up.
A government balanced budget is
A. a situation in which the government's spending is exactly equal to the total taxes and other revenues it collects during a given time period. B. all federal government debt irrespective of who owns it. C. the total value of all outstanding federal government securities. D. an excess of government spending over government revenues during a given time period.
Suppose the economy is operating below its full employment level. The Fed
A. can move the economy toward the full employment level by expanding the money supply to increase aggregate supply. B. can move the economy toward the full employment level by expanding the money supply to increase aggregate demand and to hold prices constant. C. can move the economy toward the full employment level by expanding the money supply to increase aggregate demand through both its direct and its indirect effects. D. is powerless to affect either aggregate demand or aggregate supply. Fiscal policy is needed.