An increase in the budget surplus
a. raises net exports and domestic investment.
b. raises net exports and reduces domestic investment.
c. reduces net exports and raises domestic investment.
d. reduces net exports and domestic investment.
a
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A government-inhibited good is one that
A) the political process has determined is socially undesirable. B) the political process has determined is socially desirable. C) freely competitive markets have determined is socially desirable. D) we want to encourage the consumption of.
A budget deficit will be most inflationary if the aggregate
A. demand curve is very steep. B. demand curve is very flat. C. supply curve is very flat. D. supply curve is very steep.
Under a system of flexible exchange rates, transactions that increase the supply of the nation's currency to the foreign exchange market will cause the nation's
a. currency to depreciate in value. b. currency to appreciate in value. c. trade deficit to increase. d. products to become more expensive to foreigners.
A fractional reserve banking system:
A. is susceptible to bank "panics" or "runs." B. prevents money creation through the lending process. C. only tends to exist in developing economies. D. prevents the Federal Reserve from influencing the money supply.