Which of the following will restore an economy to full employment, if it is operating below full employment due to a decrease in net exports?
A) A reduction in the investment in the economy
B) A reduction in the demand for goods and services in the economy
C) A decrease the real exchange rate
D) An increase in the interest rate
C
You might also like to view...
In general, what is the final result of trade barriers?
What will be an ideal response?
People increase their labor supply in response to a temporary increase in government purchases because
A) current or future taxes will increase, making them financially worse off. B) they need to work more to keep up with their neighbors. C) interest rates will rise, causing a substitution effect. D) higher spending today will lead to higher spending in the future, as well.
The colonies as a whole had a significant commodity trade deficit with England. In order to finance this deficit the colonies relied on all of the following sources of income except
a. a commodity trade surplus with Southern Europe. b. the sale of colonial shipping services. c. mining of gold and silver that were used to make Colonial coins. d. British government spending in the colonies.
Moral hazard is:
A. when buyers and sellers with the same information about the quality of a good or the riskiness of a situation agree to a somewhat shady deal. B. the tendency for people to behave in a riskier way or provide less effort when they do not face the full consequences of their actions. C. when people engage in behavior that is considered highly desirable by the person who bears the cost of the behavior. D. when buyers and sellers have different information about the quality of a good or the riskiness of a situation.