What have been the principal effects of the persistent trade deficits?
What will be an ideal response?
The trade deficits of the United States have had two principal effects. First, they increased current domestic consumption and allowed the nation to operate outside its production possibilities frontier. Second, they increased the indebtedness of Americans to foreigners. A possible implication of these persistent trade deficits is that they will lead to permanent debt and foreign ownership of domestic assets, or large sacrifices of future domestic consumption.
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In spite of the stated goal of discouraging behavior, if a sumptuary tax is applied on _____, behavior will not change very much
a. a good with elastic demand b. a good with inelastic demand c. income d. wealth
If the economy is represented in the graph shown and is currently at point E1, what could be said about the state of the economy?
A. There is higher unemployment than the natural rate.
B. There is lower unemployment than the natural rate.
C. The unemployment rate is just about the natural rate.
D. The unemployment rate is zero.
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, Point A necessarily represents
A. only hybrid cars being produced. B. an unattainable production point. C. what society wants. D. the economy's optimal production point.
Refer to the diagram below. If box E represents government, box D the resource market, and box B the product market, then flows (5) and (7) represent:
A. Goods and services
B. Government expenditures
C. Resources
D. Net taxes