Which of the following actions could be undertaken if the government wants to close an inflationary gap?
A. Increase taxes and reduce government spending.
B. Reduce taxes and reduce government spending.
C. Increase taxes and increase government spending.
D. Reduce taxes and increase government spending.
Answer: A
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Which of the following is a Eurodollar claim?
A) A U.S.-dollar deposit by a London firm in a Kansas City bank B) A Swiss-franc deposit by a German firm in a Swiss bank C) A U.S.-dollar deposit by a New York firm in a London bank D) A Canadian-dollar deposit by a London firm in a Toronto bank
The assumption that preferences are complete:
A) means that a consumer will spend her entire income. B) is unnecessary, as long as transitivity is assumed. C) recognizes that there may be pairs of market baskets that cannot be compared. D) means that the consumer can compare any two market baskets of goods and determine that either one is preferred to the other or that she is indifferent between them.
A shortage exists
A) in equilibrium. B) when quantity supplied is greater than quantity demanded. C) when quantity supplied is less than quantity demanded. D) at the market clearing price.
When there is a permanent fall in the foreign money supply, the exchange rate:
a. falls in the short run and rises slightly in the long run. b. falls in the short run and falls more in the long run. c. rises in the short run and falls slightly in the long run. d. rises in the short run and rises more in the long run.