Which of the following is true of the disposable income of the households?
a. An increase in the average price level lowers the disposable income of the households.
b. Disposable income refers to the purchasing power of nominal income.
c. An increase in direct taxes will lower the disposable income of the households.
d. A decrease in government transfers will increase the disposable income of the households.
e. Disposable income refers to the net private transfers of the household sector.
c
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In an economy where aggregate spending is given by Y = 5,500 + 0.6Y - 20,000r, the interest rate is currently 2 percent (0.02). If potential output equals 8,000, the central bank must ________ the interest rate to close the ________ gap.
A. raise; expansionary B. raise; recessionary C. lower; recessionary D. lower; expansionary
In an oligopsony market:
A) there are many buyers and sellers. B) there are many buyers and a single seller. C) there is a single buyer and many sellers. D) there are a few buyers and many sellers. E) there are a few buyers and a few sellers.
Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year. Country A has 200 workers. Suppose a worker in Country B can make either 18 bananas or 6 tomatoes each year. Country B has 400 workers. The opportunity cost of one tomato is:
A. lower in Country A than Country B. B. higher in Country A than Country B. C. the same in both countries. D. impossible to calculate without more information.
Which of the following is an example of U.S. foreign portfolio investment?
a. Albert, a German citizen, buys stock in a U.S. computer company. b. Larry, a citizen of Ireland, opens a fish and chips restaurant in the United States. c. Nancy, a U.S. citizen, buys bonds issued by a Japanese bank. d. Dustin, a U.S. citizen, opens a country-western tavern in New Zealand.