The blame for failing to address the budget deficits of the 1980s and early 1990s
A. is clearly the fault of the Republican administrations.
B. is clearly the fault of the Democratic Congresses.
C. is a political question rather than an economic question.
D. is an economic question rather than a political question.
Answer: C
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The public choice model raises questions about the government's ability to regulate economic activity efficiently. Which of the following statements represents the views of most economists with regard to the role of government?
A) U.S. citizens can afford more government regulation if the cost of this regulation is borne mostly by taxpayers with the highest incomes. B) Government should do more to regulate markets. The public choice model has shown that rent seeking and rational ignorance affect more markets than are currently subject to regulation. C) Agencies such as the Food and Drug Administration and the Environmental Protection Agency can serve a useful purpose, but we need to take the costs of regulation into account along with the benefits. D) Congress should abolish the Food and Drug Administration, the Environmental Protection Agency, and other agencies and commissions because the costs of their actions exceed the benefits they provide to the public.
Expansionary monetary policy refers to the ________ to increase real GDP
A) Federal Reserve's decreasing the money supply and increasing interest rates B) government's decreasing spending and raising taxes C) Federal Reserve's increasing the money supply and decreasing interest rates D) government's increasing spending and lowering taxes
Suppose a sushi restaurant is making significant economic profit in the short run. In the long run
A) more people will open sushi restaurants, reducing the economic profit for each restaurant. B) high barriers to entry keep people from opening sushi restaurants. C) the government will require the sushi restaurant to sell part of its interests in the city. D) more people will open steak restaurants, increasing the economic profit for the sushi restaurant.
Which of the following is not included in Nation A's reserves account in the balance of payments?
a. Changes in official gold holdings. b. The stock official (i.e., central bank) holdings of foreign currencies. c. Increases in borrowing rights at the International Monetary Fund. d. All of the above are included in reserves.