A main reason the federal government may choose to spend would be the:
A. desire to achieve full-employment GDP.
B. real interest rates decrease.
C. government expected to earn a large return on its spending.
D. real interest rates increase.
Answer: A
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When interest rates rise in the United States (with the price level fixed), the value of the dollar ________, domestic goods become ________ expensive, and net exports ________
A) falls; less; fall B) falls; more; rise C) rises; more; fall D) rises; less; fall
If the elasticity of supply coefficient for a good is one-sixth (in absolute terms), we know:
a. that for every 1% increase in quantity, there will be a 6% increase in price. b. that for every 1% increase in quantity, there will be a 6% decrease in price. c. that for every 6% increase in quantity, there will be a 1% increase in price. d. that for every 6% increase in quantity, there will be a 1% decrease in price.
If two goods are substitutes, then
a. an increase in the demand for one of them will lead to an increase in demand for the other b. an increase in the demand for one of them will lead to a decrease in demand for the other c. an increase in the supply of one of them will lead to an increase in supply of the other d. an increase in the supply of one of them will lead to a decrease in supply for the other e. they cannot be produced at the same time
Which of the following would cause a debit entry in the U.S. balance of payments?
a. Canadian citizens increase their shopping trips to the United States b. more U.S. citizens vacation in Austria c. Italian citizens stop vacationing in Monte Carlo and go to Miami instead d. the United States sells oil-drilling equipment to Kuwait