Questions that involve value judgments are
A. Positive questions.
B. Normative questions.
C. Not relevant to microeconomics.
D. Objective.
B. Normative questions.
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If government spending is $900 billion while government revenue is $600 billion, the government is said to have a
A) $600 billion budget deficit. B) $1,500 billion budget deficit. C) $300 billion budget deficit. D) $300 billion budget surplus.
Describe inflation targeting rule as a monetary policy. What are its benefits?
What will be an ideal response?
Suppose that one-year Treasury bills yield 6 percent in the United States and 4 percent in Britain. Investors will be indifferent between them if they expect the dollar to
A) depreciate against the pound by approximately 2 percent. B) appreciate against the pound by approximately 2 percent. C) depreciate against the pound by approximately 33 percent. D) appreciate against the pound by approximately 33 percent.
The marginal propensity to consume (MPC)
A. is greater than 1 only if the marginal propensity to save is greater than 1. B. shows how much of an extra dollar of real disposable income is spent. C. shows how much real disposable income changes when consumption falls. D. shows the percentage of real disposable income consumed at each level of income.