The LM curve is drawn for a given:
a. money supply.
b. interest rate.
c. nominal income.
d. real income.
Ans: a. money supply.
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If the marginal propensity to consume in a country is 0.6, then a $5,000 increase in transfer payments will lead to a _____ in real GDP
a. $8,000 increase b. $2,500 decrease c. $5,000 decrease d. $7,500 increase
Other fundamental things equal, an increase in the exchange-rate value of the domestic currency will make domestic goods
A. more expensive in the domestic market. B. less competitive in the international markets. C. more expensive to produce. D. more in demand internationally.
Unemployment generally ________ during recessions and ________ during expansions.
A. falls; rises B. rises; rises C. rises; falls D. falls; falls
The primary effect of an inheritance tax is _____
a. to encourage the liquidation of assets b. provide significant government revenue c. encourage capital formation d. the encouragement of pre-death asset transfers