When the Federal Reserve System buys bonds in the open market, the national debt
A. Must increase as long as the Fed buys only newly issued bonds.
B. Must increase.
C. Will decrease because the Fed is a government agency.
D. Is not affected.
Answer: D
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If the current period has a CPI of 143, then the amount of inflation since the base period is
A) 143 percent. B) 157 percent. C) 57 percent. D) 43 percent. E) unknown without knowing the base period's CPI.
Assume a marginal propensity to consume of three-fourths. If private planned investment decreases by $10 billion and government spending increases by $13 billion, the national income will increase by
a. $4 billion. b. $12 billion. c. $3 billion. d. $2.25 billion.
Which statement best describes the U.S. real GDP?
a. Over the long term, U.S. real GDP have remained relatively steady. b. Over the long term, U.S. real GDP have increased modestly. c. Over the long term, U.S. real GDP have decreased slightly. d. Over the long term, U.S. real GDP have increased dramatically.
The Hicks family owns a blueberry farm in Maine. The Ward family owns a blueberry farm in Massachusetts. A drought in Massachusetts destroys half of the Ward family's harvest for one year. For the Ward family, their
a. transitory income for the year of the drought likely exceeds their permanent income. b. permanent income likely exceeds their transitory income for the year of the drought. c. transitory income likely will be affected but the permanent income of the Hicks family will increase. d. permanent income likely will be affected but the permanent income of the Hicks family will not be affected.