The idea that government budget deficits do not matter under certain circumstances is
A) called the Friedman-Lucas theory.
B) called the Ricardian equivalence theorem.
C) attributed to Edward Prescott and Finn Kydland.
D) preposterous.
B
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Which of the following CANNOT be a source of comparative advantage?
A) Climate B) Resource stock available C) Education of workforce D) Domestic prices of goods and services
The Federal Reserve econometric model estimates that a 1 percent increase in government spending, with the money supply increased to hold the interest rate constant, will
A) increase real GDP by 3 percent in 3 years. B) increase real GDP by 3 percent in 4 years. C) increase real GDP by 1 percent 2 years. D) have no effect on real GDP after 3 years.
The portion of the money supply controlled by a central bank is
a. currency. b. deposits. c. reserves. d. the monetary base. e. the money multiplier.
Which of the following is a government sponsored enterprise that funds or guarantees a substantial number of mortgage loans in the U.S.?
a. Fannie Mae b. Freddy Mac c. both A and B above d. neither A nor B above