Which of the following assumptions is true of government spending and taxes?
What will be an ideal response?
They do not depend on the level of GDP
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The two key factors that trigger speculative attacks on emerging market currencies are
A) deterioration in bank balance sheets and severe fiscal imbalances. B) deterioration in bank balance sheets and low interest rates abroad. C) low interest rates abroad and severe fiscal imbalances. D) low interest rates abroad and rising asset prices.
Anything whose value can change is a:
A) variable. B) constant. C) hypothesis. D) all of the above.
For the purposes of calculating GDP using the expenditure approach, which of the following payments is not included in the government expenditures component?
A. The wages paid by a state government to the workers in its welfare department B. The wages paid by a local government to its road crew C. The federal government's purchase of a submarine from a shipbuilder D. Social Security payments
A prediction from the kinked demand curve model of oligopoly is that, for an individual firm, small changes in:
A. Demand will lead to changes in price or output B. Marginal revenue will lead to changes in price and output C. Marginal cost will lead to changes in price and output D. Marginal cost will not lead to changes in price or output