Refer to Figure 27-2. In the graph above, if the economy is at point A, an appropriate fiscal policy by Congress and the president would be to
A) execute an open market sale of government securities.
B) increase marginal income tax rates.
C) lower the discount rate of interest.
D) increase government transfer payments.
D
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The market value of all currently produced final goods and services within a county in a given period of time by domestic and foreign supplied resources is called:
A) GNP. B) GDP. C) NNP. D) none of the above.
All competitive firms earn zero economic profit in both the short run and the long run
a. True b. False Indicate whether the statement is true or false
Comparing the effect on the monetary base between an open market purchase of government securities from a bank and the same open market operation conducted with the general public, the monetary base
A) decreases by the same amount if the general public sells the securities or if a bank sells the securities. B) does not change if it is the general public that sells the securities. C) increases by a larger amount if a bank sells the securities than if the general public sells the securities. D) increases by a larger amount if the general public sells the securities than if a bank sells the securities. E) increases by the same amount if the general public sells the securities or if a bank sells the securities.
Assume that the central bank purchases government securities in the open market. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the quantity of real loanable funds per time period and reserve-related (central bank) transactions in the context of the Three-Sector-Model?
a. There is not enough information to determine what happens to these two macroeconomic variables. b. The quantity of real loanable funds per time period rises, and reserve-related (central bank) transactions remains the same. c. The quantity of real loanable funds per time period rises, and reserve-related (central bank) transactions become more positive (or less negative). d. The quantity of real loanable funds per time period falls, and reserve-related (central bank) transactions become more negative (or less positive). e. The quantity of real loanable funds per time period and reserve-related (central bank) transactions remain the same.