If the federal government borrows from households to pay for increased budget deficits, this will cause
A. a decrease in planned investment and an increase in planned consumption.
B. an increase in planned investment and planned consumption.
C. an increase in planned investment and a decrease in planned consumption.
D. a decrease in planned investment and planned consumption.
Answer: D
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In a nation's balance of payments, the current account includes
A) the changes in the official reserve transaction account. B) the purchases of foreign assets. C) the balance of the trade account, the balance of the services account, and net unilateral transfers. D) all of the above.
Suppose France subsidizes French wheat farmers, while Germany offers no subsidy to German wheat farmers. As a result of the French subsidy, sales of French wheat to Germany
a. may prompt German farmers to invoke the unfair-competition argument. b. increase the consumer surplus of German buyers of wheat. c. increase the total surplus of the German people. d. All of the above are correct.
If unemployment is a problem, the Fed could ______ bonds and ______ the reserve requirement.
A. buy; increase B. buy; decrease C. sell; increase D. sell; decrease
Based on the circular flow model, goods and services flow from:
A. households to businesses in product markets. B. businesses to households in product markets. C. households to businesses in factor markets. D. businesses to households in factor markets.