The ceteris paribus assumption is employed in economic analysis, in order to:
A. State economic goals
B. Simplify the complex world
C. Evaluate an economic system
D. Approximate real-world conditions
Answer: B
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Which of the following does NOT contribute to the choice of a policy of hyperinflation?
A) war B) increased price of energy paid to foreigners C) price of export commodities increase D) diminished ability to collect taxes
When oligopolistic firms interacting with one another each choose their best strategy given the strategies chosen by other firms in the market, we have
a. a cartel. b. a group of oligopolists behaving as a monopoly. c. a Nash equilibrium. d. the perfectly competitive outcome.
Which of the following statements is true concerning the global flow of foreign direct investment (FDI) since 1990?
A. Mexico has received more FDI inflows than has the United States. B. FDI flows into and within the European Union fell. C. The proportion of global FDI that flowed into the United States increased. D. The proportion of global FDI that flowed into developing countries increased.
Suppose the economy is operating at its full-employment-noninflationary GDP and the MPC is .75. The federal government now finds that it must increase spending on military goods by $21 billion in response to deterioration in the international political
situation. To sustain full- employment-noninflationary GDP, government must: A. reduce taxes by $28 billion. B. reduce transfer payments by $21 billion. C. increase taxes by $21 billion. D. increase taxes by $28 billion.