Budget deficits are inflationary when
a. the Federal Reserve contracts the money supply.
b. the economy has lots of slack and the aggregate supply curve is horizontal.
c. the economy is at full employment and the aggregate supply curve is vertical.
d. private citizens buy the bonds to finance the debt.
c
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If net exports increase by 100 and the mpc is 0.75, equilibrium aggregate output increases by
A) 100. B) 250. C) 400. D) 750.
Refer to Figure a. Charlie and Joe both want to ride shotgun with their mother, so they play a game of rock-paper-scissors to determine who gets to sit in the front seat. If -1 represents a loss, 1 a win and 0 a tie, and Joe's payoff is shown in the upper left-hand corner of each cell, while Charlie's appears in the lower right-hand corner, which set of rules is illustrated in the following payoff matrix?
A. Rock tears paper, paper covers scissors, scissors clip rock
B. Rock crushes scissors, scissors cuts paper, paper covers rock
C. Rock crushes scissors, scissors cuts paper, scissors clip rock
D. Rock tears paper, paper covers scissors, paper covers rock
If domestic saving is greater than domestic investment, then a country will have a ________ and positive net capital ________.
A. trade surplus; inflows B. trade surplus; outflows C. trade deficit; inflows D. trade deficit; outflows
During the Great Depression:
A) By 1933, 25 percent of the nation's workers had lost their jobs. B) output reached its lowest level in 1929. C) the production possibilities curve shifted sharply inward, which explains the drop in output, jobs, and overall prosperity. D) firms increased output but used fewer workers.