If net exports is a negative number, the government sector must ________ if the private sector is in a ________
A) run a surplus; surplus
B) equal zero; deficit
C) run a deficit; surplus
D) The statement errs because the accounts are not related.
C
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Macroeconomists are distinguished from microeconomists because macroeconomists are more interested in
a. inflation and unemployment than in individual markets. b. large corporations rather than small businesses. c. inflation in the United States rather than inflation in Costa Rica. d. the demand for oil rather than the demand for corn.
Fiat money is money
a. that has little intrinsic value and is not backed by a commodity. b. that is not included as part of the M1 money supply. c. that is backed by gold or silver held on reserve by the government. d. such as coins that are made from metal.
A competitive equilibrium is Pareto efficient because at the competitive equilibrium,
A) prices have been allowed to adjust. B) there are no further gains from trade. C) the final outcome is different from the original inefficient endowment. D) all members of society can be made better off.
Endogenous growth theory attempts to
A. explain how societies can more easily reach the "Golden Rule." B. replace the Solow model with a model in which money growth plays a key role. C. explain why productivity changes. D. show how population growth reduces capital and output.