Because immigration raises the marginal products and the return to nonlabor factors of production, in the short run owners of nonlabor resources often support:
a. open borders.
b. tighter restrictions on immigration.
c. controls on the flow of foreign direct investment (FDI).
d. immigration of persons only for humanitarian reasons.
Answer: a. open borders.
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A booming economy can make investors:
A. wary of future downturns, and shift the supply curve for loanable funds to the left. B. eager to borrow money, and shift the demand curve for loanable funds to the right. C. eager to borrow money, and shift the supply curve for loanable funds to the right. D. wary of future downturns, and shift the demand curve for loanable funds to the left.
In the short run, and especially when unemployment is high, crowding in is the stronger force. The short-run effects of government’s financial rescue program and fiscal stimulus package helped the economy increase aggregate demand curing the Great Recession.
Answer the following statement true (T) or false (F)
If the cyclically adjusted deficit as a percentage of GDP is zero in one year and 1 percent of GDP the next year, it can be concluded that:
A. the federal government is borrowing money. B. fiscal policy is contractionary. C. fiscal policy is expansionary. D. the federal government is lending money.
Refer to the below graphs. Which graph depicts a situation where sellers are increasing their output because their product is becoming more popular among buyers?
A. Graph A
B. Graph B
C. Graph C
D. Graph D