Changes in government purchases affect planned spending ________, and changes in taxes and/or transfers affect planned spending ________.
A. directly; directly
B. indirectly; indirectly
C. directly; indirectly
D. directly; not at all
Answer: C
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Use the following graph to answer the next question.
Which line in the graph above would best illustrate the asset demand for money curve?
A. Line 1 B. Line 2 C. Line 3 D. Line 4
The U.S. saving rate is
A) rapidly increasing. B) higher than that of most major countries. C) low. D) negative.
According to a study by Thomas Cooley and Gary Hansen, the cost in lost consumption of a 10% per annum rate of inflation is
A) negative. B) approximately 0.001%. C) approximately 0.5%. D) approximately 5.0%.
Is increased capital spending the only way for an economy to expand its production possibilities curve? a. No, an economy can also expand by invention and innovation
b. No, an economy can also grow by reallocating more resources toward the production of consumption goods. c. Yes, more capital investment is the only way to expand production possibilities. d. Yes, although increased production of capital clearly increases the opportunity cost.