In the figure above, the ________ gap is one trillion dollars. To close the gap, the government can ________ government expenditure and/or ________ taxes
A) recessionary; increase; decrease
B) inflationary; decrease; increase
C) inflationary; increase; increase
D) recessionary; decrease; decrease
E) recessionary; decrease; increase
A
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Which of the following is the best way to describe equilibrium in a market? At equilibrium, the
A) price is the lowest possible. B) price is usually affordable to most people. C) supply and demand curves can never shift again. D) quantity supplied equals the quantity demanded.
In the market for reserves, if the federal funds rate is between the discount rate and the interest rate paid on excess reserves, a ________ in the reserve requirement ________ the demand for reserves, lowering the federal funds interest rate,
everything else held constant. A) rise; decreases B) rise; increases C) decline; increases D) decline; decreases
Sovereign debt crises:
a. always occur when debt/GDP ratios reach a specific point. b. mean that the optimal budget deficit is zero. c. can lead to foreign capital flight. d. can lead to exchange rate depreciation. e. both c and d.
When you specialize in a task that you do best, you are applying the:
a. law of supply. b. law of comparative advantage. c. law of demand. d. law of absolute advantage.