If the government were to reduce its spending, it would be enacting:
A. contractionary fiscal policy.
B. expansionary fiscal policy.
C. a budgetary crisis intervention.
D. expansionary budgetary policy.
A. contractionary fiscal policy.
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Define the term rent. Explain why confiscation of rents would cause more than a simple transfer of income from resource owners to the government.
What will be an ideal response?
Purchasing power parity implies:
A. a basket of goods will sell for the same price in all countries as long as there are no trade barriers is a free flow of capital across borders. B. a basket of goods should sell for the same price in all countries, even if trade barriers exist. C. as long as all goods and services are traded freely across international boundaries, one unit of domestic currency should buy the same basket of goods anywhere in the world. D. a basket of goods cannot sell for the same price in different countries due to the different wage rates.
Define gross domestic product
A production possibilites frontier is a strait line when
a. the more resources the economy uses to produce one good, the fewer resources it has available to produce the other good. b. an economy is interdependent and engaged in trade instead of self-sufficient. c. the rate of tradeoff between the two goods being produced is constant. d. the rate of tradeoff between the two goods being produced depends on how much of each good is being produced.