Which of the following illustrates government acting as a referee?
A. Taxing high income persons
B. Enforcing contract provisions between buyer and seller
C. Buying new weapons for defense
D. Mailing checks to Social Security recipients
E. Collecting data on imports and exports
Answer: B
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When policy makers take actions in response to or in anticipation of some change in the overall economy, there is
A) passive policy making. B) rationalization policy making. C) rational expectations policy making. D) active policy making.
Refer to Table 2-12. If the two countries specialize and trade, who should export canoes?
A) Honduras B) They should both be exporting canoes. C) Guatemala D) There is no basis for trade between the two countries.
The purchasing power of money
A) rises when prices fall. B) rises when prices rise. C) is set by the Fed in January of each year. D) is constant.
Poverty is relative and not absolute.
A. True B. False C. Uncertain