Which of the following is NOT a deficit item on the international accounts balance sheet for a country?
A) imports of merchandise
B) military spending abroad
C) purchases of foreign currency
D) exports of merchandise
D
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An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
Suppose the economy is initially operating at full employment. A reduction in the size of the budget deficit will cause which of the following in the short run?
A) a recessionary gap. B) an increase the price level and a reduction in real GDP. C) an increase in the price level with no change in real GDP. D) an increase in real GDP and an increase in the price level.
Which of the following is a basic measure of macroeconomic performance?
A. The U.S. stock market B. Growth in output C. The U.S. bond market D. Population growth
Which of the following assumptions is known as exclusion restrictions?
A. The assumption that an instrumental variable is excluded from a regression model and is correlated with the error term. B. The assumption that an instrumental variable is excluded from a regression model and is correlated with an exogenous explanatory variable. C. The assumption that an exogenous explanatory variable is excluded from a regression model and is uncorrelated with the error term. D. The assumption that an endogenous explanatory variable excluded from a regression model and is uncorrelated with the error term.