State and local governments usually finance programs like highways, libraries, hospitals, health care, parks, and police and fire protection
a. True
b. False
Indicate whether the statement is true or false
True
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Tariffs are costly to consumers because
A. the supply of the imported good increases. B. the price of the imported good falls. C. consumers have to pay higher-prices. D. import competition increases for domestic goods.
Subprime lending gained popularity because of all of the following, except:
A. investing in a home was seen as the safest investment one could make. B. helping poor to own a home. C. the value of homes had not fallen for over 60 years. D. it was meant to encourage those with risky credit to make a safe investment.
The reserve ratio is 20 percent. A check for $1 million is deposited in Bank A, written on an account from Bank B. After the check clears what are the new excess reserves at Bank A, and by how much does the money supply change if all banks make loans so that they have zero excess reserves?
A. $200,000; $800,000 B. $800,000; 0 C. $800,000; $800,000 D. $200,000; $1 million
Answer the following statements true (T) or false (F)
1) The idea that the economy will "self-correct" when confronted with changes in aggregate demand is associated with new classical economics. 2) In the new classical theory, a fully anticipated change in aggregate demand and the price level will temporarily change real output, but an unanticipated change will not. 3) Mainstream economists say that recessions are unlikely to occur today because prices and wages are highly flexible downward. 4) Efficiency wage theory says that an above-market wage can reduce labor costs per unit of output by eliciting greater work effort, lowering supervision costs, and reducing job turnover.