Recall the Application about how technological advances in another country may hurt the United States to answer the following question(s). In this Application, how will the United States gain when China becomes more prosperous?
A. American companies get a larger market for U.S. goods.
B. we can borrow more money from them.
C. they can share the costs of keeping world peace.
D. we can access the new technology they develop.
Answer: A
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Explain the income effect and the substitution effect due to an increase in the wage rate
What will be an ideal response?
If the yield curve slope is flat for short maturities and then slopes steeply upward for longer maturities, the liquidity premium theory (assuming a mild preference for shorter-term bonds) indicates that the market is predicting
A) a rise in short-term interest rates in the near future and a decline further out in the future. B) constant short-term interest rates in the near future and further out in the future. C) a decline in short-term interest rates in the near future and a rise further out in the future. D) constant short-term interest rates in the near future and a decline further out in the future.
To decrease the nation's money supply, the Fed can:
A. decrease the reserve requirement. B. buy bonds. C. decrease the discount rate. D. increase the discount rate.
Based on the following information, what is the amount of public saving? ReceiptsExpendituresFederal Government2,5002,000State and Local Governments1,5001,500
A. +2,500 B. -300 C. +200 D. +3,700