Farming in poor countries is considered to be:
A. cost intensive.
B. labor intensive.
C. capital intensive.
D. production intensive.
Answer: B
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Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
A country produces only apples and bananas. Moving from point A to point B along its production possibilities frontier, 5 apples are forgone and 4 bananas are gained. What is the opportunity cost of a banana?
A) 1 banana B) 5/4 of an apple C) 4 apples D) 4/5 of an apple E) None of the above answers is correct.
Which of the following policies followed by the Clinton administration were not Keynesian policies?
a. Reducing the budget deficit during a strong expansion. b. Concentrating tax increases on upper income households. c. Attempting to increase government spending in 1992 when the U.S. economy was below its natural rate of output. d. Adjusting capital gains taxes for inflation in order to encourage savings.
Refer to Scenario 5.10. Hillary's indifference curves showing her preferences toward risk and return can be shown in a diagram. Expected return is plotted on the vertical axis and standard deviation of return on the horizontal axis
Although her indifference curves are upward sloping and bowed downward, their slope is very gradual (they are almost horizontal). These indifference curves reveal that Hillary is: A) risk neutral. B) risk averse. C) risk loving. D) irrational.