Which of the following will result in an increase in the output of a nation?
a. A decrease in exports
b. A decrease in investment spending
c. A decrease in interest rates
d. A decrease in consumption
c
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According to rational expectations theory,
a. there is absolutely nothing government can do, even in the short run, to reduce the economy's unemployment rate. b. the government can use fiscal policy such as increased government spending or lower tax rates to reduce unemployment. c. a modern extension of Keynesian economics exists. d. discretionary fiscal policy is essential for prolonged growth. e. market participants can be fooled in the long run by monetary and fiscal policy rules.
The model of short-run economic fluctuations focuses on
a. the price level and real GDP. b. productivity and economic growth. c. the neutrality of money and inflation. d. None of the above is correct.
The risk spread:
A. is always constant. B. should have an inverse relationship with the bond's yield. C. should have a direct relationship with the bond's price. D. is also known as the default-risk premium.
NAFTA refers to the:
A. National Association of Free Trade Agencies. B. National Alliance for Foreign Trade and Assistance. C. North American Free Trade Agreement. D. Northern Alliance for Tariff Adjustment.