(Exhibit: IS-LM Fiscal Policy) Based on the graph, starting from equilibrium at interest rate r1 and income Y1, an increase in government spending would generate the new equilibrium combination of interest rate and income:
What will be an ideal response?
r2, Y3
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Since 1940, the U.S. government has experienced
A) twice as many annual budget surpluses as annual budget deficits. B) only one year with a budget surplus. C) about the same number of years with budget deficits as with budget surpluses. D) many more budget deficits than budget surpluses.
Looking at the U.S. balance of payments from 1980 to 2012, we see that the
A) official settlements account was large in the 1980s relative to the current account. B) capital and financial account has been negative for most years and was small in the late 1980s and early 1990s. C) current account has been negative for most years and was small in the late 1980s and early 1990s. D) current account was positive until 1992 then turned negative. E) current account was negative until 1992 then turned positive.
Which of the following is included in the supply of U.S. dollars in the market for foreign-currency exchange in the open-economy macroeconomic model?
a. a U.S. bank loans dollars to Tom to buy a U.S. made motorcycle b. a U.S. tire maker wants to build a new factory in China c. a U.S. company wants to import goods to sell in its retail stores d. All of the above are correct.
A monopoly:
A. is constantly threatened by the entry of new firms. B. is constrained by demand. C. is constrained because its decisions cannot affect market price. D. faces a horizontal demand curve.