Figure 18.3Refer to Figure 18.3. Livonia has a comparative advantage in the production of:
A. pogo sticks.
B. scooters.
C. both scooters and pogo sticks.
D. neither scooters nor pogo sticks.
Answer: A
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Refer to the above figure. If the economy is at E and the government wants to increase aggregate demand to AD3, but the increase in spending only shifts the aggregate demand curve to AD2, then
A) complete crowding out has occurred. B) some crowding out has occurred. C) the increased borrowing caused interest rates to fall. D) the short-run aggregate supply curve is steeper than the figure indicates.
International trade increases world economic efficiency for the same reasons that domestic trade increases national economic efficiency
a. True b. False
According to the Taylor rule, the Fed should:
a. lower the fed funds rate by 2.0% if inflation rises 1.0% above its target of 1.0%. b. raise the fed funds rate by 2.0% if inflation rises 1.0% above its target of 1.0%. c. lower the fed funds rate by 0.5% if inflation rises 1.0% above its target of 2.0%. d. raise the fed funds rate by 0.5% if inflation rises 1.0% above its target of 2.0%.
Cleanup of Superfund sites is currently funded by
a. a tax on petroleum b. annual appropriations by Congress c. a corporate environmental income tax d. monies appropriated under the American Recovery and Reinvestment Act e. all of the above f. (b) and (d) only