Several studies, some cited in the text, show that the price elasticities of demand for basic foods such as corn, potatoes, and milk are consistently
a. inconsistent over time
b. less than one
c. greater than one
d. equal to one
e. highly volatile
B
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Suppose that a $30 billion increase in government spending increases Real GDP by $150 billion, and that a $10 billion tax reduction increases Real GDP by $40 billion. In this situation, the tax multiplier is _______________ the government spending multiplier
A) less than B) greater than C) equal to D) none of the above
In the short run, when the Fed increases the nominal interest rate, the real interest rate
A) permanently falls. B) does not change. C) permanently rises. D) temporarily rises. E) temporarily falls.
What was not a grievance of the Continental Congress that met in October 1774?
a. Taxes had been imposed upon the colonies by the British Parliament. b. The colonies were not permitted to trade with nations other than England. c. England had confiscated western colonial land. d. Persons could be transported out of the colonies for trials.
Which of the following is a probable consequence of the presence of accounting rules that allow firms to hide the financial impact of actions that would harm investors?
a. Investors may be able to enforce market efficiency. b. The WTO will disenfranchise the country that allows this to happen. c. Investors will immediately organize a speculative attack and the price of stocks will inflate. d. The balance-of-payments deficit will increase, leading the economy into a debt trap. e. Investors may not be able to adequately judge when the risk of investing in a firm rises.