Which of the following is true about the occurrence of the twin deficits?
A) They occur consistently in all the economies of the world except the United States.
B) They always occur together.
C) They did not occur after 1990 in the United States.
D) They only occur when exchange rates are fixed.
C
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A firm produces staples in a perfectly competitive market and hires workers in a perfectly competitive labor market. Which of the following is true?
a. The supply curve of staples is horizontal. b. The supply curve of workers is horizontal. c. The firm's demand curve for labor is horizontal. d. The marginal revenue product of labor curve is horizontal. e. The marginal product of labor curve is horizontal.
According to the theory of rational expectations, the government can influence output
a. with appropriate fiscal and monetary policy. b. in the short run, but not in the long run. c. without affecting the price level. d. only by making unexpected changes in aggregate demand.
Suppose that a subsidy is provided for the consumption of good ABC, and the subsidy is different for different units of good ABC (e.g., $10 subsidy on the first unit of good ABC and $7 on the second unit of good ABC, etc.). The demand curve with such a subsidy will lie to the ______________ of the demand curve without a subsidy, __________ parallel to the demand curve without any subsidy.
A. left; but will not be B. left; and will be C. right; and will be D. right; but will not be
Discretionary fiscal policies that increase aggregate demand tend to result in
A. higher Real GDP ("RGDP") and a lower price level ("PI"). B. lower Real GDP ("RGDP") and a higher price level ("PI"). C. higher Real GDP ("RGDP") and a higher price level ("PI"). D. lower Real GDP ("RGDP") and a lower price level ("PI").