The net exports effect is the inverse relationship between net exports and the ____ of an economy.
A. potential real GDP
B. chain-price deflator
C. price level
D. consumption spending
Answer: C
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Because business firms often finance new investments with borrowed money, a key determinant of investment spending is
a. tax rates. b. the price level. c. the rate of inflation. d. the real interest rate.
Municipal bonds pay a relatively
a. low rate of interest because of their high default risk and because the interest they pay is subject to federal income tax. b. low rate of interest because of their low default risk and because the interest they pay is not subject to federal income tax. c. high rate of interest because of their high default risk and because federal taxes must be paid on the interest they pay. d. high rate of interest because of their low default risk and because the interest they pay is not subject to federal income tax.
Data from a study of retail drug prices by the OECD and Eurostat (2008) showed that:
a. there is some evidence that pharmaceutical prices are highly correlated with a country's per capita GDP. b. high-income countries can keep their drug prices below the OECD average by relying on strict price controls. c. the U.S. had the highest retail drug prices among the 30 countries studied. d. U.S. drug prices are double the OECD average.
In a two-period model, the same quantity of a resource will be used in both time periods
a. Whenever the discount rate is set equal to the rate price is increasing b. Whenever the discount rate is zero and the marginal net benefit curves are equal c. Whenever the discount rate is zero d. Whenever the supply constraint is binding e. Whenever Hotelling's rule applies