Economists believe that the above-normal economic growth in the United States between 1995 and 2010 was caused primarily by:
A. rising federal budget surpluses that reduced real interest rates.
B. increased entrepreneurial activity, application of information technology, and global competition.
C. increases in the rate of personal saving.
D. expansionary monetary policy.
Answer: B
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If firms receive an economic forecast predicting future decreases in the growth of real GDP, they are likely to respond by
A) increasing their level of investment spending to increase future production capacity. B) increasing their level of investment spending to increase current production capacity. C) decreasing their level of investment spending to decrease current production capacity. D) decreasing their level of investment spending to decrease future production capacity.
Which of the following statements about economic resources is true?
A) Economic resources include financial capital and money. B) All economic resources are man-made. C) Economic resources are also called factors of production. D) Economic resources are used only by businesses.
New York Times writer Michael Lewis wrote that "The sad truth, for investors, seems to be that most of the benefits....are passed through to consumers free of charge." To which of the following did Lewis refer?
A) the Enron accounting scandal B) apple farming in New York state C) new technologies developed in the 1990s D) the medical screening industry
The deposit expansion multiplier is decreased if the Federal Reserve
A) buys government securities. B) sells government securities. C) lowers reserve requirements. D) raises reserve requirements.