The government of an island nation is running a contest to see who can design a highly efficient desalination machine. The winner will get a contract to build and install the machines in every city along the coast, as well as a $10 million dollar grant for further research. This government is investing in ______.
a. new growth theory
b. technology
c. human capital
d. physical capital
b. technology
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In an expansion, federal tax receipts increase proportionally more than real GDP without the need for any government policy. This increase is an example of
A) discretionary monetary policy. B) automatic monetary policy. C) automatic fiscal policy. D) discretionary fiscal policy. E) the effect of deficit spending.
According to research by Stock and Watson, the recent decline in volatility in many macroeconomic variables was a
A) sudden drop that occurred around 1984. B) gradual decline throughout the 1980s. C) sudden drop that occurred around 1990. D) gradual decline throughout the 1990s.
Which of the following statements is correct?
I. If other factors are held constant, the level of employment in the economy determines real Gross Domestic Product (GDP). II. According to classical economists, only voluntary unemployment exists in the long run. A) I only B) II only C) Both I and II D) Neither I nor II
The difference between a standard and an inverted yield curve is that when the yield curve is inverted, the longer-term bond pays a lower interest rate than a short-term bond.
Answer the following statement true (T) or false (F)