Caterpillar, Inc deciding to expand its forklift production line and Sears deciding to open an outlet in Raleigh, North Carolina, are examples of
a. transitory decisions
b. investment decisions
c. saving decisions
d. autonomous consumption
e. permanent income
B
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Cooperation in an economy characterized by extensive specialization requires
A) a rapid exchange of accurate information. B) flexible government controls. C) high unemployment to stem inflation. D) highly trained economists to "fine-tune" the economy. E) price controls.
Firms that participate in regular open market transactions with ________ are called primary dealers
A) Treasury banks B) the Federal Reserve C) mortgage lenders D) commercial banks
Which of the following is least likely to increase the ratio of investment to real GDP? A reduction in ________
A) transfer payments B) subsidies to farms and corporations C) defense outlays D) spending on highways
The difference between a fixed tax and a variable tax is that
a. fixed taxes can never be changed, but variable taxes can be changed. b. a change in fixed taxes has no effect on aggregate demand, but a change in variable taxes has an impact. c. a variable tax changes when GDP changes, but a fixed tax does not change with GDP. d. a variable tax can be changed easily, whereas changing fixed taxes requires a constitutional amendment.