What will decrease LRAS?
a. a natural disaster that destroys much of the infrastructure in the country
b. an increase in the labor force
c. an increase in the nation's energy reserves
d. all
Ans: a. a natural disaster that destroys much of the infrastructure in the country
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The crowding out of consumer spending by an increase in taxes will be the greatest when
A) consumers would have spent the entire amount they now must pay in taxes. B) consumers would have saved the entire amount they now must pay in taxes. C) consumers would have spent only a fraction of the amount they now must pay in taxes. D) the government has a history of increasing taxes on a regular basis.
The value of leisure time is
A) included in GDP and, in recent years, has become an increasing large part of GDP. B) excluded from GDP. C) zero. D) directly included in GDP but, in recent years, has become a decreasing large part of GDP. E) directly included in GDP and, in recent years, has not changed much as a fraction of GDP.
Direct transfer programs are generally less efficient and less politically acceptable than subsidy programs
a. True b. False
Ceteris paribus, a downward shift in the net exports function will cause:
a. equilibrium real GDP to decrease. b. equilibrium real GDP to increase. c. savings to decrease. d. net exports to increase. e. government budget deficit to decline.