The key variable in determining changes in a country's standard of living is the:
A. interest rate.
B. long-run rate of economic growth.
C. unemployment rate.
D. inflation rate.
Answer: B
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Assume that Kelly's various possible activities are mutually exclusive. The opportunity cost from choosing one activity equals the
a. summed value of all her alternative activities b. summed value of all her alternative activities minus the value of the chosen activity c. value of the next most valuable alternative activity d. value of the next most valuable alternative activity minus the value of the chosen activity e. summed value of all her alternative activities minus the value of the next most valuable alternative activity
Answer the following statement(s) true (T) or false (F)
1. Fiscal policy usually refers to actions at the federal government level. 2. In the early 1980s, tax cuts put the U.S. economy in a recession. 3. The largest fiscal stimulus package ever was enacted under President Obama. 4. Tax cuts and increased government purchases shift the aggregate demand curve in opposite directions. 5. Tax cuts are a fiscal tool.
A student football team manager examined variables influencing the team's record and concluded that the best scores resulted when the "third-string" team played the most minutes. Therefore he recommended that the third-string team become the first team. Why is this conclusion probably
a. He failed to recognize that correlation is not causation. b. He did not review the entire game strategy carefully enough. c. He committed the fallacy of composition. d. He confused positive and normative analysis.
If the Fed decreases the reserve requirement, it will likely:
A. decrease the amount of excess reserves which will eventually decrease the money supply. B. increase the amount of excess reserves which will eventually increase the money supply. C. increase the amount of excess reserves which will eventually decrease the money supply. D. decrease the amount of excess reserves, which will eventually increase the money supply.