Suppose the U.S. Congress is successful in enacting tariffs large enough to eliminate the current account deficit. What would happen to the level of domestic investment?
A) It would not change.
B) It would fall to a level equal to national saving.
C) It would rise and exceed national saving.
D) It would rise to a level equal to net foreign investment.
B
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The addition of government to the circular-flow model illustrates that government
A. purchases goods in the product market. B. provides services to businesses and households. C. purchases resources in the resource market. D. does all of these.
The old adage "rules are made to be broken" would typically be associated with economists who might advocate ________
A) stabilization policy B) monetary policy C) rule-determined policy D) discretionary policy E) fiscal policy
If the price of good A falls, it will: a. increase a consumer's total utility from the consumption of that good
b. increase a consumer's marginal utility from consuming the last unit of that good. c. decrease a consumer's marginal utility from consuming the last unit of that good. d. do both (a) and (c).
According to the Keynesian model, in what ways will expansionary fiscal policy stimulate aggregate demand?