Which of the following best describes the four sector model?
(a) Y=C-I+G+M-X.
(b) Y = C -I - G - X + M.
(c) Y = C + I + G + M - X.
(d) Y = C + I + G + X - M.
Answer: (d) Y = C + I + G + X - M
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The economist who recognized that lags in policy can explain the difficulty in conducting monetary policy was
A) Adam Smith. B) John Nash. C) Milton Friedman. D) Joseph Schumpeter.
Which of the following is not necessarily a consequence of occupational licensing laws?
A) They ensure that licensed professionals meet some minimum qualifications. B) They result in a higher quality of service. C) They restrict competition. D) Consumers pay higher prices for the services of licensed professions.
Countercyclical fiscal policy is viewed by most economists
a. as the perfect instrument for preventing boom and bust economies b. as a useful but imperfect instrument for reacting to boom and bust economies c. having no impact in the short run or long run. d. doing more damage than good in both the short run and long run. e. as having an impact only in the long run.
In the long run, if inflation is higher in India than in the U.S., one would expect
A. the dollar to depreciate relative to the rupee B. the rupee to depreciate relative to the dollar C. the rupee to appreciate relative to the dollar D. two of the above are correct