The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending.
B. recessionary gaps.
C. expansionary gaps.
D. unemployment.
Answer: B
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Under current U.S. tax laws, the interest paid on any debt-financed investment ________ tax deductible and the interest expense ________ the net present value of an investment.
A) is not; raises B) is; lowers C) is; raises D) is not; lowers
Debbie realizes that her twin brother Dudley breaks out in hives every time he eats oysters, and concludes that when Dudley feels a case of hives coming on, he must get a craving for oysters. Debbie is
A. probably misguided in that there is no apparent correlation or causation in this situation. B. definitely confusing correlation with causation. C. very probably correct in her conclusion that Dudley craves oysters whenever he is about to break out in hives. D. likely correct that there is causation, but the causation is more likely running in the opposite direction in that eating oysters is the probable cause of Dudley's hives.
Which of the following is a benefit of income inequality?
A. It promotes economic growth in the less developed economies. B. It motivates people to be at the high end of income distribution. C. It reduces the intensity of business fluctuations in an economy. D. It reduces the taxes to be paid by the ones in the low end of income distribution.
How much is the APS?
C = $7 trillion Disposable income = $10 trillion Autonomous consumption = $3.5 trillion?