In an open? economy, if the federal government has a budget? deficit, the trade balance is more likely to be
A. a surplus.
B. either a deficit or surplus; it depends on macroeconomic conditions.
C. a deficit.
D.balanced.
Ans: C. a deficit.
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The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
In Figure 10-5 above, suppose that the level of government expenditures increases. This causes a movement of the steady-state point such as from points
A) A to B. B) D to B. C) D to C. D) A to C. E) A to D.
By Gresham's law, commodity money will always drive out fiduciary money
a. True b. False Indicate whether the statement is true or false
Paper money in the United States is
A. backed by gold in Fort Knox. B. partially backed by gold and silver. C. entirely fiat money. D. fully convertible into gold at fixed prices.