A tax cut of $5 billion will have a greater effect on the economy than an increase in government purchases of $5 billion.
Answer the following statement true (T) or false (F)
False
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A speculative attack on an overvalued currency leads to a(n) ________ in international reserves and a(n) ________ in the fundamental value of the currency.
A. decrease; decrease B. increase; decrease C. increase; increase D. decrease; increase
An upturn in business confidence may cause firms to ________ their estimates of MPK, leading to a ________ capital stock that matches MPK to the user cost of capital and thus ________ of net investment
A) lower, larger, a contraction B) lower, larger, an expansion C) lower, smaller, a contraction D) raise, smaller, a contraction E) raise, larger, an expansion
In Exhibit 1, what is the producer surplus when the price is $4 and the quantity is one?
a. $7
b. $4
c. $3
d. $1
When the Fed engages in a tight money policy, the price of government bonds tend to
A. fall. B. rise. C. remain constant. D. move in the same direction as the bonds' market interest rate return.