Suppose the balance on the current account is +$50 billion and the balance on the capital account is +$1 billion. The balance on the financial account is:
A. -$51 billion.
B. -$50 billion.
C. -$49 billion.
D. +$51 billion.
A. -$51 billion.
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If the economy moves upward along its short-run Phillips curve, in the AS-AD diagram, this movement is shown by a
A) rightward shift of the AS curve and a movement along the AD curve. B) movement downward along the AS curve as a result of a leftward shift of the AD curve. C) movement upward along the AS curve as a result of a rightward shift of the AD curve. D) leftward shift of the AS curve and a movement along the AD curve. E) rightward shift of potential GDP.
Using the above figure, the origin is at which point?
A) point a B) point b C) point c D) None of the points in the figure is the origin.
Property taxes are the product of the tax rate (T) and the assessed value (V). The total property tax collected in your city (P) is: P = T•V. If the value of properties rise 4% and if Mayor and City Council reduces the property the tax rate by 2%, what happens to the total amount of property tax collected? [HINT: the percentage rate of change of a product is approximately the sum of the
percentage rates of change.} a. It rises 6 %. b. It rises 4 %. c. It rises 3 %. d. It rises 2 % e. If falls 2%.
Exhibit 16A-3 Macro AD/AS Model
As shown in Exhibit 16A-3, assume the marginal propensity to consume MPC equals 0.80. Using discretionary fiscal policy, federal government spending should be _________ in order to restore the economy from E1to full employment.
A. increased by $2 trillion B. decreased by $2 trillion C. decreased by $.40 trillion D. increased by $.80 trillion