To evaluate the size of the federal budget deficit or surplus over time, it would be best to look at the
A) budget deficit or surplus as a percentage of tax revenues.
B) budget deficit or surplus as a percentage of government spending.
C) absolute size of the budget deficit or surplus.
D) budget deficit or surplus as a percentage of GDP.
D
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Use the following diagram to answer the next question.
Based on this diagram, we can say ________.
A. a contractionary policy is likely to be more effective than an expansionary policy B. the Fed is pursuing a contractionary monetary policy C. the Fed is pursuing an expansionary monetary policy D. an expansionary policy is likely to be more effect than a contractionary policy
In the monetary small open-economy model with a flexible exchange rate, an increase in the foreign price level decreases
A) domestic output, but has no effect on the domestic price level or the nominal exchange rate. B) the domestic price level, but has no effect on domestic output or the nominal exchange rate. C) the nominal exchange rate, but has no effect on domestic output or the domestic price level. D) the domestic price level and the nominal exchange rate, but has no effect on domestic output.
If labor supply and labor demand both increase, employment
a. and the real wage rate will both increase b. will increase but the real wage rate will fall c. will increase but the real wage rate will remain constant d. and the real wage rate will remain constant e. will increase but the effect on the real wage rate will depend on the magnitude of the shifts
Monetary policy should be countercyclical, which implies that it should be loosened during a recession and tightened during periods of inflation
a. True b. False Indicate whether the statement is true or false