If prices in the economy rise, then
A) the purchasing power of a dollar stays constant.
B) the purchasing power of a dollar rises.
C) the purchasing power of a dollar declines.
D) the purchasing power of a dollar cannot be determined.
C
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Assume that the central bank lowers the discount to increase the nation's monetary base. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the GDP Price Index and current international transactions balance in the context of the Three-Sector-Model? State your answer after the macroeconomic system returns to complete equilibrium
a. The GDP Price Index falls and current international transactions balance becomes more negative (or less positive). b. The GDP Price Index rises and current international transactions balance becomes more negative (or less positive). c. The GDP Price Index and current international transactions balance remain the same. d. The GDP Price Index rises and current international transactions balance remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
GDP per person tells us the income and expenditure of the
a. richest person in the economy. b. poorest person in the economy. c. average person in the economy. d. entire economy.
According to economist Robert Barro, if parents are concerned about the welfare of their children, then each adult generation will voluntarily reduce the burden of federal debt on future generations, and thus forego the stimulative effect of deficit spending in the present
Indicate whether the statement is true or false
Diseconomies of scale arise primarily because:
A. the short-run average total cost curve rises when marginal product is increasing. B. of the difficulties involved in managing and coordinating a large business enterprise. C. firms must be large both absolutely and relative to the market to employ the most efficient productive techniques available. D. beyond some point marginal product declines as additional units of a variable resource (labor) are added to a fixed resource (capital).