The federal budget deficit is calculated each year by:
A. subtracting consumption and investment from government spending.
B. adding up consumption, investment, government purchases, and net exports.
C. adding up the difference between government revenues and spending over the years of the nation's existence.
D. subtracting government spending from government revenues.
Answer: D
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We know that diminishing returns has set in when ______ declines.
Fill in the blank(s) with the appropriate word(s).
Cost-push inflation is characterized by a(n):
A. decrease in aggregate supply and no change in aggregate demand. B. increase in aggregate demand and no change in aggregate supply. C. increase in aggregate supply and a decrease in aggregate demand. D. decrease in both aggregate supply and aggregate demand.
According to the theory based on rational expectations and flexible wages and prices,
A. neither fiscal nor monetary policy influence real Gross Domestic Product (GDP) in the long run. B. only the combination of discretionary fiscal policy and conservative monetary policy can affect real Gross Domestic Product (GDP) in the long run. C. monetary policy has less effect on real Gross Domestic Product (GDP) than fiscal policy in the long run. D. fiscal policy has less effect on real Gross Domestic Product (GDP) than monetary policy in the long run.
In an economy that uses fiat money, there is no need for double coincidence of wants.
Answer the following statement true (T) or false (F)