Refer to Figure 27-9. Given that the economy has moved from point A to point B in the graph above, which of the following would be the appropriate fiscal policy to achieve potential GDP?
A) decrease the money supply B) increase government spending
C) increase interest rates D) increase taxes
D
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Malmud wants to know how much the economy of his country has grown since he was born 30 years ago. First, he compares the GDP from 30 years ago to today’s GDP and finds that the economy grew by over 300 percent. This seems wrong to Malmud, because he does not believe his country is vastly wealthier than it was when he was young. Then he realizes that he has not considered how much the population of his country has grown over that same period. To get a better picture of how much the country’s economy has grown, he should look at the change in ______.
a. average incomes b. physical capital c. real GDP per capita d. diminishing returns
How might Roger’s Plastics Company experience an adverse selection of patients for its health insurance plan?
a. by requiring all employees to be covered under the program b. by offering voluntary insurance, which ends up getting used only by people who know they are sick c. by requiring all participants to undergo extensive screening for conditions that make them ineligible d. by offering free insurance to all employees
Damage from which of the following is NOT covered in a basic homeowner's policy?
A) Fire and lightning B) Explosion C) Windstorm and hail D) Flood
Which of the following is an advantage of a common currency in Europe?
A) Each country could conduct its own, independent monetary policy. B) Exchange rate uncertainty within the common currency area would be eliminated. C) Each country could conduct its own, independent fiscal policy. D) all of the above E) none of the above