In a closed economy with output fixed, an increase in government spending matched by an equal increase in taxes will:
A. increase consumption.
B. increase the interest rate.
C. increase investment.
D. leave all other variables unchanged.
Ans: B. increase the interest rate.
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The action time lag is the time period that elapses
A) between when an economic problem manifests itself and it is officially acknowledged. B) between the recognition of an economic problem and implementing policies to solve it. C) between implementing policies to solve an economic problem and when the results of that policy can be measured. D) between the beginning of the budgetary process and the final budget resolution.
Which of the following would cause a rightward shift in the aggregate supply curve?
a. Larger-than-expected wage increases. b. Lower oil prices. c. Increased investment spending. d. Greater government regulation.
The supply of the U.S. dollar on the foreign exchange market is generated by:
a. demand for U.S. exports. b. the U.S. demand for the products and financial assets of other countries. c. the U.S. demand for domestic goods and services. d. foreign demand for U.S. products. e. foreign demand for U.S. financial assets.
Refer to Scenario 12.1. What is the probability of either Simon, Paula, or both of them trying to rescue the man?
A) 9% B) 49% C) 70% D) 91%