Which of the following best describes an adverse outcome of short-term government deficits?
a. In the short run, a government that runs a small budget deficit can shift aggregate demand to the right and trigger severe inflation.
b. In the short run, a government that runs a very large budget deficit can shift aggregate demand to the left and trigger severe inflation.
c. In the short run, a government that runs a very large budget deficit can shift aggregate demand to the right and trigger severe inflation.
d. In the short run, a government that runs a small budget deficit can shift aggregate demand to the left and trigger severe inflation.
c. In the short run, a government that runs a very large budget deficit can shift aggregate demand to the right and trigger severe inflation.
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Firms hire more labor as long as
A) the real wage rate is greater than the additional output the labor produces. B) extra labor will produce more output. C) the real wage rate is less than the additional output the labor produces. D) the nominal wage rate exceeds the real wage rate. E) the nominal wage rate is less than the real wage rate.
At the current quantity of table saws, the marginal social cost is more than the marginal social benefit. Then
A) production of table saws should be decreased to reach the efficient level. B) production of table saws should be increased to reach the efficient level. C) production of table saws is currently at the efficient level. D) producer surplus will be larger than consumer surplus.
Which of the following is the best example of a voluntary export restraint?
A) a $5,000 per-car fee imposed on all sports utility vehicles imported into the United States B) a subsidy granted by the U.S. government to domestic sports utility vehicle manufacturers so they can compete more effectively with foreign sports utility vehicle manufacturers C) a tax placed on all sports utility vehicles sold in the domestic market D) a limit set by the Japanese government on the number of sports utility vehicles that the United States can import from Japan
The relative price of a country's goods and services in terms of foreign goods and services is the real exchange rate
Indicate whether the statement is true or false