Forward-looking households may reduce consumption expenditures today if they believe that the government is currently
A) borrowing to run a budget deficit, and to pay back these loans in the future may require higher taxes.
B) running a budget surplus, and the increase in the government's supply of money will generate inflation in the future.
C) experiencing a balanced budget, and will therefore not be implementing any fiscal policy to stabilize the economy.
D) cutting federal spending to decrease the budget deficit, which will raise the real interest rate, the inflation rate , and the unemployment rate.
A
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Which of the following is true about the consumer price index?
A) It is updated continuously to account for the introduction of new goods. B) It accounts for people switching away from goods whose prices have risen. C) It assumes that consumers purchase the same quantity of each product in the market basket each month. D) It accurately reflects quality changes in goods and services over time.
Which of the following is not considered a criticism of globalization?
a. International corporations serve only the interests of the corporations. b. Globalization promotes "free" but not "fair" trade. c. Globalization encourages harmful labor practices. d. Globalization promotes only trade based on comparative, and not absolute advantage. e. Globalization occurs at the cost of environmental quality.
The most-favored-nation policy implies that the United States will
a. extend concessions made in bilateral trade agreements to all other nations. b. give preference to North American nations in all trade matters. c. work to lower trade barriers with Canada. d. extend tariff and quota concessions only to major trading partners.
Federal Reserve monetary policy goals include..
What will be an ideal response?