An economy is considered a small open economy if it
A. doesn't trade internationally.
B. is too small to affect the world real interest rate.
C. has a zero trade balance.
D. has GDP less than 1% of world GDP.
Answer: B
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Why would a higher tax rate lower the government purchases multiplier? What does the tax rate have to do with the government purchases multiplier?
What will be an ideal response?
A price system is considered to be efficient when
A. all resources are allocated to the highest-valued uses. B. firms produce more than what consumers want. C. an underground market develops. D. it fails to have the goods that consumers want.
Studies on fast-food stores in Texas and New Jersey suggest that the federal minimum wage law
A. has huge ramifications on unemployment. B. does not have a discernable impact on unemployment. C. causes unemployment for high skilled workers. D. new entrants to the work force search for longer periods.
It has been found that
a. less-developed countries have more equality of income distribution. b. more-developed countries have more equality of income distribution. c. only prior communist countries have more equality of income distribution. d. income distribution cannot be measured among countries with different political and economic systems.