Which of the following is most representative of the functional finance view of the macroeconomy?
A. Budgets should be balanced. Doing otherwise is morally wrong.
B. The government should decide on tax and spending plans based on their effects on the economy.
C. The economy is self-regulating and the best thing the government can do to enhance stability is to stay out of the way.
D. Crowding out almost completely cancels out any deficit spending, so fiscal policy is likely to be ineffective.
Answer: B
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Which of the following is LEAST likely to be a reason for firms to form a cartel?
A) to maximize profits of the cartel B) to raise competition among firms in the cartel C) to cut back output of the cartel D) to set common prices among firms in the cartel
Using the growth accounting equation, if the growth rate of technology is 3%, the growth of labor is 2% and the growth of capital is 1% then if ?=0.25 then growth of output can be estimated to be:
A. 4.25%. B. 4.00%. C. 6.00%. D. 4.75%.
Interest rates are higher the
A. larger the amount of the loan, holding other things constant. B. shorter the duration of the loan. C. greater the risk. D. lower the inflation rate.
An underemployed worker who is looking for a full-time job is
A. Phantom unemployed. B. Structurally unemployed. C. A discouraged worker. D. None of the choices are correct.