In a closed economy, without the government:
A) savings equals net exports. B) consumption equals investment.
C) consumption equals savings. D) savings equals investment.
D
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Limit commitment occurs when
A) collateral is required to get a loan. B) one cannot borrow as much as necessary to conduct business. C) one cannot be forced to repay a loan. D) the bank can sell your loan to another bank.
Suppose a production possibilities frontier (PPF) has been plotted on a graph. If the horizontal axis of the graph measures the output of capital goods and the vertical axis measures the output of consumer goods, then a point inside the PPF represents: a. a larger quantity of capital goods than that represented by a point along the PPF. b. an inefficient output combination of the two goods in
the economy. c. an unattainable output combination of the two goods in the economy. d. an output combination of more consumer goods than capital goods. e. a larger quantity of consumer goods than that represented by a point along the PPF.
________________ fiscal policy decreases the level of aggregate demand, either through cuts in government spending or increases in taxes.
a. Expansionary b. Contractionary c. Lenient d. Strict
If for some reason Americans desired to decrease their purchases of foreign assets, then other things the same
a. both the real exchange rate and the quantity of dollars exchanged in the market for foreign-currency exchange would fall. b. both the real exchange rate and the quantity of dollars exchanged in the market for foreign-currency would rise. c. the real exchange rate would rise and the quantity of dollars exchanged in the market for foreign-currency would fall. d. the real exchange rate would fall and the quantity of dollars exchanged in the market for foreign-currency would rise.