If at some level of GDP the economy is experiencing an unintended decrease in inventories:
A. the aggregate level of saving will decline.
B. the price level will fall.
C. the business sector will lay off workers.
D. domestic output will increase.
D. domestic output will increase.
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If Project A has a cost of $2 and provides a benefit of $3, and Project B has a cost of $ 5 and provides a benefit of $8, which of the following statements is true?
A) A shift from Project A to Project B increases the net benefit by $1. B) The net benefit of Project A is $5. C) An individual can optimize by choosing Project B. D) Project A has a higher net benefit than Project B.
Refer to the scenario above. This implies that the country experienced a ________ during that year
A) trade deficit B) budgetary surplus C) budgetary deficit D) trade surplus
Interest rates spreads between corporate and government bonds ________
A) are procyclical B) have the same characteristics as the government interest rate spreads C) are countercyclical D) all of the above E) none of the above
Which of the following is a true statement regarding why the government produces public goods?
a. Public goods are valued highly by some but not by the majority. b. Because of the electoral system, the public sector tends towards producing those goods that help politicians get elected. c. Some goods should be produced whether they are economically efficient or not. d. Because it is difficult to exclude those who do not pay for public goods.