John Maynard Keynes and his followers argued that the Great Depression was primarily the result of:
a. excessive government spending.
b. large budget deficits.
c. the perverse monetary policies of the Fed.
d. insufficient aggregate spending on goods and services.
d
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Ceteris paribus, if interest rates in the United States rise relative to those abroad, then the surplus in the U.S. capital account would
A. Become smaller and the dollar would depreciate. B. Grow larger and the dollar would depreciate. C. Grow larger and the dollar would appreciate. D. Become smaller and the dollar would appreciate.
When people became ________ concerned with the underlying value of their houses and became ________ concerned with the expectations of the prices of their houses increasing, a housing bubble occurred
A) less; less B) less; more C) more; less D) more; more
When countries specialize in producing those goods in which they have a comparative advantage, they
A. allocate their resources more efficiently, but they do not necessarily maximize their combined output. B. maximize their combined output, but they do not necessarily allocate their resources more efficiently. C. do not necessarily maximize their combined output, and they also do not necessarily allocate their resources more efficiently. D. maximize their combined output and allocate their resources more efficiently.
The Federal Reserve lowers interest rates. As a result, in the short run, real GDP ________ and the price level ________
A) increases; rises B) increases; falls C) decreases; rises D) decreases; falls