Which of the following is true of government purchases?
What will be an ideal response?
They are decided by public officials.
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The increase in government spending on unemployment insurance payments to workers who lost their jobs during a recession and the decrease in government spending on unemployment insurance payments to workers during an expansion are examples of
A) discretionary fiscal policy. B) discretionary monetary policy. C) automatic stabilizers. D) automatic monetary policy.
During World War II, whenever interest rates would rise and the price of bonds would begin to fall, the Fed would
A) lower reserve requirements. B) raise reserve requirements. C) make open market purchases of government securities. D) make open market sales of government securities.
The United States has a dual banking system consisting of state banks and national banks
a. True b. False Indicate whether the statement is true or false
In the specificfactors model, suppose that a country has a comparative advantage in manufacturing output. Will workers be better or worse off following the opening of trade with other countries?
a. Workers will be better off because the nominal wage increases. b. Workers will be better off because both nominal and real wages increase. c. Workers may be better off or worse off because the real wage in terms of the agricultural good rises and the real wage in terms of the manufactured good falls. d. Workers may be better off or worse off because the real wage in terms of the agricultural good falls and the real wage in terms of the manufactured good rises.