According to the Ricardo-Barro effect, what is the effect on the real interest rate of a government budget surplus?
What will be an ideal response?
The government budget surplus, by itself, increases the supply of loanable funds. However the Ricardo-Barro effect asserts that people decrease their private saving by the exactly same amount. This change precisely offsets the effect the government budget surplus has on the supply of loanable funds. Thus a government surplus has no effect on the equilibrium real interest rate.
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Refer to the scenario above. What will be the GDP per capita of country B at the beginning of year 2012?
A) $2,555.15 B) $28,82.85 C) $2,450.65 D) $2,646
Your friend notices that U.S. auto production and U.S. population growth have moved together over several decades. He reasons that one way to slow population growth is for the government to order the auto makers to cut back on production. You gently point out to him that he
a. is correct only when the economy is in a recession b. has mistakenly inferred causation from observed correlation c. has ignored secondary effects d. has committed the fallacy of composition e. is correct only when the United States enjoys economic growth
The linear regression equation, Y = a + bX, was estimated. The following computer printout was obtained: 
Given the above information, the parameter estimate of b indicates
A. a 10-unit decrease in X results in a 213.6 unit increase in Y. B. X increases by 8.03 units when Y increases by one unit. C. X decreases by 21.36 units when Y increases by one unit. D. Y decreases by 2.66 units when X increases by one unit.
The Federal reserves policy regarding announcing its policy decisions has:
A. always been to announce it immediately; that was part of the original Federal Reserve Act of 1913. B. only recently gone to immediate announcement; until 1994 these policy decisions were secret. C. changed so that now the Fed does not release its decisions publicly. D. been to release the decisions immediately since its early failure at preventing the Great Depression.