Expansionary fiscal policy in an open economy
A. leads to a balance of trade surplus.
B. decreases America’s capital account surplus and the current account deficit by the same amount.
C. increases both America’s capital account surplus and current account deficit by equal amounts.
D. increases America’s capital account surplus more than it increases the current account deficit.
Answer: C
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When mark-up equals 50% and AC = MC, then demand elasticity will be
A) -1. B) -1.5. C) -2. D) -3.
In the short run, a tax placed on a perfectly competitive industry should
A. always increase the price. B. increase the total amount of the good sold. C. not affect the total amount of the good sold. D. decrease the total amount of the good sold.
Based on the graph showing rational expectations and the AD/AS model, the change caused by expansionary policies is ______.
a. higher price levels
b. lower unemployment
c. higher RGDP
d. lower price levels
Which theories of the economy lead to the assertion that markets "self-adjust" to deviations from their long-term growth trend?
A. Keynesian theories B. Monetarist theories C. Classical theories D. Supply-side theories