What does international voluntary trade do?
(a) Exploits small countries
(b) Benefits all trading partners
(c) Places labor unions at an unfair disadvantage
(d) Forces productive domestic firms to close their doors
(b)
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The size effect and the diffusion effect always occur in isolation
Indicate whether the statement is true or false
Crowding-out is eliminated when the LM curve is ________, so that expansionary fiscal policy ________ the interest rate
A) vertical, does not affect B) vertical, raises C) horizontal, does not affect D) horizontal, raises
An automatic stabilizer: a. increases inflationary pressure during expansions
b. Increases the drop in disposable income during recessions and increases the jump in disposable income during expansions. c. reduces the drop in disposable income during recessions and reduces the jump in disposable income during expansions. d. increases tax revenue relative to government spending throughout the business cycle. e. decreases tax revenue relative to government spending throughout the business cycle.
Etienne’s government encourages its citizens to consume almost all their incomes. What will most likely be the result of this policy?
a. fluctuating economic growth b. little economic growth c. steady economic growth d. rapid economic growth