Capital flight is a problem to DVCs because it:
A. causes the value of a DVCs currency to appreciate.
B. reduces the volume of DVC investment.
C. reduces the flow of foreign aid from the IACs.
D. causes inflation in the DVCs.
B. reduces the volume of DVC investment.
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To compensate for the possibility of indirect crowding out, a government engaging in expansionary policy aimed at eliminating a recessionary gap could
A) reduce taxes rather than increase government spending. B) increase spending less than the simplest Keynesian model would predict. C) both reduce taxes and reduce spending to be able to achieve full employment. D) increase spending more than the simplest Keynesian model would predict.
The sum of the components of incomes is called
A) gross domestic product at factor cost. B) net domestic product at market prices. C) gross domestic product at market prices. D) GNP. E) net domestic product at factor cost.
Undistributed profits ________ counted as part of GDP because ________
A) are not; households are not paid by the firms B) are; they can be used to buy other goods C) are; they are considered income paid to households and loaned back to firms D) are not; they are considered an intermediate good E) are; firms are required to pay corporate income taxes on them
An increase in the real interest rate outside of the United States will cause net capital outflows to ________ and cause the dollar to ________ relative to other currencies
A) increase; appreciate B) increase; depreciate C) decrease; appreciate D) decrease; depreciate