Suppose Congress increased spending by $100 billion and raised taxes by $100 billion to keep the budget balanced. What will happen to real equilibrium GDP?
A) Real equilibrium GDP will fall.
B) Real equilibrium GDP will rise.
C) Real equilibrium GDP will initially rise, but then fall below its previous equilibrium value.
D) There will be no change in real equilibrium GDP.
B
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Explain how a consumer's income and the prices of goods limit consumption possibilities
What will be an ideal response?
The problem faced by the lender that the borrower may take on additional risk after receiving the loan is called
A) adverse selection. B) moral hazard. C) transactions costs. D) diversification.
International trade under a floating exchange rate system
a. has been trouble-free owing to the stabilizing role of speculators in the currency markets. b. has suffered from so many problems that the volume of trade has declined significantly. c. exposes businesses to unavoidable risks when exchange rates change. d. has been subject to wild runs on currencies that were on the verge of devaluation.
When a country removes a specific import restriction, it always benefits every worker in that country.
Answer the following statement true (T) or false (F)