Which of the following is true of government purchases?
a. They are positively related to current income.
b. They are negatively related to current income.
c. They are directly related to taxes
d. They are decided by public officials.
e. They depend on the market rate of interest.
d
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Suppose the government wants to maintain a balanced budget. To achieve this goal, when the economy falls into recession government would need to ________ taxes, which would cause aggregate demand to ________
A) increase; decrease B) decrease; increase C) decrease; decrease D) increase; increase
Generally with bond ratings, the higher the rating, the ________ the interest rate an investor will receive and the ________ the risk that the issuer of the bond will default
A) higher; higher B) lower; lower C) higher; lower D) lower; higher
According to the World Bank, low-income economies are heavily concentrated in:
a. Europe and Africa. b. Europe and Asia. c. Asia and Africa. d. Asia and Australia. e. North America and Australia.
If a decrease in income results in an increase in the quantity demanded for a product, the product is ________, and the value of the income elasticity of demand is ________.
A. a normal good; positive B. a normal good, negative C. an inferior good; positive D. an inferior good; negative