If Ricardian equivalence holds, one way to get the expansionary effects of a tax cut to occur is:
A. pair it with increased government spending.
B. pair it with reduced government spending.
C. to run a campaign inspiring people to buy goods made in the United States.
D. None of these will create the expansionary effects of a tax cut.
Answer: D
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The U.S. dollar will appreciate if
a. the U.S. demand for foreign exchange decreases b. the U.S. demand for foreign exchange increases c. the U.S. supply of foreign exchange decreases d. Americans want to buy more foreign goods e. foreigners want fewer American goods
The public sector can stimulate research and development through
A. changes to the income tax. B. changes to the tariff rate. C. changes to immigration. D. changes to the capital gains tax.
If you have a checking account at Citibank, the account is a liability of the bank.
Answer the following statement true (T) or false (F)
If S = -200 + 0.2Y and I = 100, then the equilibrium level of income is
A. 1,200. B. 1,500. C. 3,000. D. 4,000.