If a government raises its expenditures by $50 billion and at the same time levies a lump-sum tax of $50 billion, the net effect on the economy will be to
A. increase real GDP by $50 billion.
B. increase real GDP by more than $50 billion.
C. make no change in real GDP.
D. increase real GDP by less than $50 billion.
Answer: A
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Which economy managed to eliminate economic profits and losses?
A) Socialist Cuba B) Socialist China C) Fascist Italy D) Nazi Germany E) None of the above.
Under a fixed-rate unified currency regime, each country belonging to the system
a. may pursue an independent monetary policy. b. gives up its monetary policy independence to one central bank with the power to expand and contract the money supply. c. is committed to conducting highly expansionary monetary policy in order to maintain the convertibility of its currency. d. must fix its domestic interest rates in order to maintain the convertibility of its currency.
During the 2020 Summer Olympics in the city of Tokyo, some Tokyo residents rented rooms to visitors. This behavior
A. raised the demand for hotel rooms in Tokyo and should have been prevented by the city of Tokyo. B. helped reduce the shortage of hotel rooms caused by the high demand during the Olympics. C. reduced the demand for tickets to the Olympics since many local residents left Tokyo while they rented out space in their homes. D. helped raise the prices that visitors paid for hotel rooms in Tokyo.
Criteria for an optimum currency area include all the following except
A. extensive trade with each other. B. a common language. C. similar business cycle patterns. D. fiscal transfers.