Government's role of providing national defense is considered:
A) enforcing a legal system.
B) providing certain goods and services.
C) redistributing income.
D) expanding economic growth.
Ans: B) providing certain goods and services.
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A trade policy that allows a country to gain at the expense of other countries is called
A) countervailing duty policy. B) a beggar-thy-neighbor policy. C) an antitrust policy. D) a dumping policy.
Which factors led to the large rise in the government's budget deficit in the early 1980s?
a. The Clinton Administration's health care program b. A cutback in military spending c. An income tax increase d. A build up in military spending e. A large and unprecedented economic expansion
Suppose the economy was in equilibrium, and the national government increased spending by $200 billion. Monetarist theory would predict that the nation's:
a. Real risk-free interest rate will remain unchanged, but the money multiplier will rise. b. Real risk-free interest rate will fall causing real GDP to rise. c. Real risk-free interest rate will fall causing the money multiplier to rise. d. Real risk-free interest rate will rise but real GDP will remain the same. e. Real risk-free interest rate will rise causing real GDP to fall.
Suppose an economy produces two goods, food and machines. This economy always operates on its production possibilities frontier. Last year, it produced 1000 units of food and 47 machines. This year, it is producing 1050 units of food and 52 machines. Which of the following events could not explain the increase in output?
a. a reduction in unemployment b. an increase in available labor c. an improvement in technology d. Any of these events could explain the increase in output.