Suppose the Fed pursues a policy that leads to higher interest rates in the United States. How will this policy affect real GDP in the short run if the United States is an open economy? This policy
A) increases investment spending, consumption spending, and net exports, all of which increase GDP.
B) reduces investment spending, consumption spending and net exports, all of which reduce GDP.
C) reduces investment spending and consumption spending, both of which reduce GDP. Net exports rise which increases GDP.
D) reduces investment spending and consumption spending, both of which reduce GDP. Net exports fall which increases GDP.
B
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Refer to the above table. Two countries have per capita real GDPs in 2010 of $5000. If country A has a 4 percent growth rate and Country B a 5 percent growth rate, what will the per capita real GDPs of each be in the year 2060?
A) A: $15,000; B: $30,000 B) A: $40,000; B: $60,000 C) A: $35,550; B: $57,500 D) A: $24,000; B: $35,200
In Lithasia, the opportunity cost of producing a chair is two tables and in Barylia, the opportunity cost of producing a chair is 1/2 table. Which of the following statements is true?
A) Barylia has a comparative advantage in producing chairs. B) Lithasia has a comparative advantage in producing chairs. C) Barylia has a comparative advantage in producing tables. D) Lithasia has a comparative disadvantage in producing tables.
There are no justifications for tax rates above the revenue-maximizing point
a. True b. False
What is the primary disadvantage for a firm that obtains financial capital through a bank loan?
a. Having to make scheduled interest payments b. Losing control of its operations to bank stockholders c. Being monitored by the Securities and Exchange Commission d. Selling off ownership of the company until the loan is repaid