What could cause a decrease in the price level and simultaneously an increase in GDP similar to the 1920s in the United States?
A. an increase in interest rates
B. a decrease in interest rates
C. a decrease in consumer confidence
D. an increase in productivity
Answer: D
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In the above figure, the sum of real planned investment spending, government expenditures, and net export spending is equal to
A) $0.5 trillion. B) $1.0 trillion. C) $1.5 trillion. D) $2.0 trillion.
Which of the following checks issued by the government represents a transfer payment?
A) The federal government pays a defense contractor for development of a missile system. B) The federal government pays a retiree her Social Security benefits. C) The state of Oregon pays a construction firm for its work in repairing a state highway. D) The state of Illinois pays groundskeepers at the state capitol building their weekly wages.
In the short run there is ________ relationship between the unemployment rate and the rate of inflation.
A. an indeterminant B. no C. a negative D. a positive
Currently XYZ's compensation system is such that only top managers receive compensation based on the company's performance, while everybody else in the company receives a fixed salary. Moreover, top managers have full discretion over the launch of new products. Due to the failure of the last three products launched by XYZ, top managers are contemplating modifying the allocation of decision rights concerning new products. What changes would make more economic sense?
A. Delegating decision rights down the ladder to those employees who are likely to have more specific knowledge and leaving their current compensation scheme unchanged B. Leaving the allocation of decision rights unchanged, but changing the compensation of all the employees by awarding them bonuses based on their performance C. Delegating decision rights down the ladder to those employees who are likely to have more specific knowledge and changing their compensation by awarding them bonuses based on their performance D. Giving themselves good bonuses and reducing benefits for all other employees