The three major categories of government spending are
A) government purchases, defense spending, and interest payments.
B) defense spending, Medicare and Medicaid, and net interest.
C) government purchases, transfer payments, and net interest.
D) government purchases, defense spending, and transfer payments
Ans: C) government purchases, transfer payments, and net interest.
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If a 10 percent price increase causes the quantity demanded for a good to decrease by 10 percent, demand is unitary elastic
a. True b. False Indicate whether the statement is true or false
Economist Alban William Phillips believed that: a. the Fed should follow a policy rule because it does not know the lag structure. b. the Fed should follow a policy rule to avoid monetary surprises
c. there is an inverse relationship between inflation and unemployment. d. private sector spending is inherently unstable. e. government spending is inherently unstable.
If the national debt rises to the debt ceiling and there is currently a budget ________, the Congress and the President must agree to ________ the debt ceiling or else the federal government will have insufficient funds to pay its bills and will be forced to shut down
a. surplus, lower b. deficit, raise c. surplus, lower d. none of the above
The United States is divided into __________ Federal Reserve districts, each with a district bank
A) three B) eight C) twelve D) twenty E) fifty