On the graph above, an increase in government spending, with no change in taxes, is likely to move the economy from point 1 to point ________
A) 8
B) 6
C) 3
D) 5
B
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To avoid the conflicts and suffering of a "zero-sum society," an economy must maintain a
A) positive rate of productivity growth. B) positive rate of inflation. C) foreign trade surplus D) government budget deficit.
A potential money multiplier of 10 means that
a. excess reserve requirements are 90 percent b. a new deposit of $1,000 results in new demand deposits of $10,000 c. the legal reserve requirement is 10 percent d. there can be no more lending available e. the initial deposit must necessarily be $10
Which of these is an example of depreciation?
(A) A worker's truck breaks down more often after 80,000 miles of driving. (B) An employer fires a worker for repeatedly arriving late to work. (C) A share of stock declines in value over several months. (D) A clothing store owner reduces the price of a belt by $10 to encourage sales.
Suppose purchasing power parity holds. If the price level in the United States is 100 dollars per good and the price level in Japan is 250 yen per good, then the nominal exchange rate is ________ yen per dollar.
A. 0.25 B. 2.5 C. 0.4 D. 4.0