In the classical model with an open economy, an increase in the trade deficit as a result of a tax cut, causes a decline in the interest rate, attracting more loanable funds from abroad
a. True
b. False
B
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Moral hazard refers to the actions people take after they have entered into a transaction that make the other party to the transaction worse off
Indicate whether the statement is true or false
All of the following describe the conflict between divisions EXCEPT
a. some activities across divisions benefit from coordination b. managers of profit centers care too little about the effects of their decisions on other divisions c. corporate executives reward managers who are able to become more efficient d. corporate executives cannot tell when one divisional manager's decision is appropriate or not
To state that national saving is equal to investment, for a closed economy, is to state an accounting identity
a. True b. False Indicate whether the statement is true or false
In 2009-2010 the federal government
A) achieved a budget surplus for the first time in more than a decade. B) ran a budget surplus, and this reduced the size of the national debt. C) financed approximately 40 percent of its expenditures through borrowing. D) ran a budget deficit, and this reduced the size of the national debt.