Calculate the government spending multiplier if, an increase in government spending by $5 million increases real GDP by $25 million
a. 0.2
b. 0.5
c. 2
d. 5
e. 6
d
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With respect to the financial crisis of 2007-2009, some economists argue that financial service firms should have done a better job of assessing the risk involved in investing in mortgage-backed securities
Better governance in this context refers to which of the following? A) improving the assessment of investments. B) improving the monitoring of investments. C) improvements in aligning the actions of top managers with the preferences of shareholders D) all of the above
Despite an expansionary monetary policy, an economy experiences a recession. Everything else held constant, the recession could occur in spite of the rightward shift of the LM curve if
A) consumer confidence decreases sharply. B) there is an investment boom. C) the money supply increases. D) taxes are cut.
The knowledge and skills possessed by the workforce is known as
A. The inequality trap. B. Human capital. C. Human finance. D. Investment capital.
A domestic monopoly producing a close substitute of an imported product would prefer to be protected by a quota than a tariff that results in the same amount of imports because
A. the deadweight loss will be smaller with a quota. B. a quota allows the monopoly to charge a higher price. C. unlike a tariff, a quota does not generate revenue for the government. D. after the imposition of the tariff the price of the imported good declines in the domestic market.