If a nation's currency buys fewer units of a foreign currency today than yesterday, we say the value of its currency has:
a. appreciated.
b. depreciated.
c. stagnated.
d. become inverted.
Ans: b. depreciated.
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Assume the economy is closed and that it is operating at full employment. Which statement is TRUE when the size of the budget deficit decreases?
A) The increased amount of public goods will crowd out privately produced goods. B) A reduction in the growth of productivity, and a reduction in society's standard of living will occur. C) The interest rate will decrease, leading to an increase in investment and capital formation. D) Demand and supply of credit will increase.
A firm will shut down in the short run if
A. P < AVC. B. P > AVC. C. AVC > AFC. D. TR > TC.
Which of the following is not true with regard to the burden of the U.S. national debt?
a. The debt does burden future generations to the extent that it is sold to foreigners. b. Budget deficits are not appropriate for stabilization purposes under any circumstances. c. The debt will reduce the nation's capital stock if incurred during a fully employed economy. d. The large deficits of the 1980s and early 2000 were particularly worrisome because they were not attributable to recessions.
A flat or "fair" tax would increase the tax burden on the ___________ and _______________ and decrease the tax burden on the __________.
What will be an ideal response?