In an open economy, an increase in (G ? T) will
a. decrease (X ? IM).
b. increase (X ? IM).
c. leave (X ? IM) unchanged.
d. have an unpredictable effect on (X ? IM).
a
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Open market operations are an appropriate tool for day-to-day changes in monetary policy
Indicate whether the statement is true or false
Arguments in support of protectionism (and against free trade) include all of the following EXCEPT
A) new and troubled industries need to be protected until they acquire sufficient strength to compete equally against their foreign counterparts. B) jobs at home should be protected from cheap foreign labor. C) protectionism increase total domestic consumption possibilities. D) national security interests require that nations retain the ability to produce vital materials at home and avoid dependence upon potential enemies.
Expansionary fiscal policy can cause a rise in real GDP in combination with
a. an increase in the price level. b. a decrease in the price level. c. no change in the price level. d. a decrease in the price level if the aggregate supply curve is upward sloping.
If your firm's production function has constant returns to scale, then if you double all your inputs, your firm's output will
a. double and productivity will rise. b. double but productivity will not change. c. more than double and productivity will rise. d. more then double but productivity will not change.