Which of the following is an example of a normative question?
a. When will the government increase spending on education?
b. What effect will the government’s increased spending on education have?
c. How much will the government increase spending for education?
d. Should the government increase spending for education?
d. Should the government increase spending for education?
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When the Fed sells government securities, banks' reserves ________, the quantity of money ________, and the federal funds rate ________
A) decrease; decreases; falls B) decrease; increases; falls C) increase; increases; falls D) increase; decreases; rises E) decrease; decreases; rises
In the monetarist view, if there is an increase in money growth then
a. the money supply and inflation will grow proportionally, with no effect on output and employment. b. the money supply grows faster than the inflation rate, with unfavorable effects on output and employment. c. the money supply grows faster than the inflation rate, leading to an increase in output and employment in the short-run. d. there will be no effect on output, employment, or inflation, in the long-run. e. both c and d.
Suppose that X and Y are substitute goods. If the price of good X increases, we can expect:
a. the demand for good X to shift to the left. b. an upward movement along the demand curve for good Y. c. the demand curve for good Y to shift to the right. d. a downward movement along the demand curve for good Y. e. the demand curve for good Y to shift to the left.
The expenditure approach for the calculation of GDP includes spending on:
a. consumption, investment, durable goods and exports. b. consumption, gross private domestic investment, government spending for goods and services, and exports. c. consumption, gross private domestic investment, government spending for goods and services, and net exports. d. consumption, net private domestic investment, government spending for goods and services, and net exports. e. consumption, gross private domestic investment, all government spending including transfer payments, and net exports.