In the Heckscher-Ohlin model, what assumption is made about opportunity costs?
What will be an ideal response?
That opportunity costs increase
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The term investment refers, in general, to
A) any action today that has costs today. B) any action today that has costs today but provides expected benefits in the future. C) only large projects, such as building a new factory, undertaken by private firms. D) only the creation of capital goods undertaken by private firms or the government.
The components of aggregate expenditure are consumption expenditure,
A) investment, government expenditure on goods and services, and net exports. B) investment, government expenditure on goods and services, and net taxes. C) interest, government expenditure on goods and services, and net exports. D) investment, government expenditure on goods and services, and net income. E) interest, gross spending, and net spending.
Refer to the above figure. Point B is known as
A) a peak. B) a recession. C) an expansion. D) a contraction.
Assume that the federal government wishes to counteract inflation with a policy that has the smallest impact on the federal budget. Which of the following would you recommend?
a. Increase transfer payments. b. Increase government purchases. c. Decrease government purchases. d. Decrease transfer payments. e. Increase personal income taxes.