Expansionary fiscal policy can be used to reduce cyclical unemployment by
A. increasing aggregate demand so as to raise real Gross Domestic Product (GDP).
B. increasing long-run aggregate supply so as to raise real Gross Domestic Product (GDP).
C. eliminating inefficiencies from labor markets.
D. raising nominal wages so as to encourage workers to work more hours.
Answer: A
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After you finish your degree, suppose your salary is $52,000 per year. This is an example of money as
A) a medium of exchange. B) a unit of account. C) a store of value. D) M1.
When there is a positive externality
A) the marginal social benefit received by consumers is greater than the marginal private benefit. B) the marginal private benefit received by consumers is greater than the marginal private cost. C) the marginal private benefit received by consumers is greater than the external benefit. D) the marginal private benefit received by consumers is greater than the marginal social benefit.
According to new growth theory
A) physical capital is nonexcludable. B) knowledge capital is subject to increasing returns. C) knowledge capital is rival and excludable. D) knowledge capital is excludable.
What is the difference between foreign direct investment and foreign portfolio investment?
A) Foreign direct investment involves purchases of foreign stock or bonds by individuals or firms, while foreign portfolio investment involves a firm purchasing or building a facility in a foreign country. B) Individuals engage in foreign portfolio investment, but only firms can engage in foreign direct investment. C) Foreign direct investment can give a low-income country access to funds and technology it would not otherwise have, but foreign portfolio investment does not expand that access. D) Foreign direct investment only takes place when governments make official purchases or foreign investments, while foreign portfolio investment takes place when firms, individuals, or the government purchase foreign investments.