Article 126 of the Treaty on the functioning of the European Union stated that the member nations had to maintain a deficit to GDP ratio of
A. less than 3 percent.
B. equal to 3 percent.
C. higher than 5 percent.
D. equal to 4 percent.
Answer: A
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Open market operations are defined as
A) a bank borrowing from the Fed. B) the buying and selling of securities by the Fed. C) the buying and selling of securities between banks. D) the amount banks can lend on each deposit. E) a bank making a loan to the Fed.
An appropriate fiscal policy response when aggregate demand is growing at a faster rate than aggregate supply is to decrease the money supply
Indicate whether the statement is true or false
Which of the following correctly describes how an increase in the price level affects consumption spending?
A) An increase in the price level lowers real wealth, which causes consumption to decrease. B) An increase in the price level raises real wealth, which causes consumption to increase. C) An increase in the price level increases the amount of money a household needs to buy goods and raises the interest rate, which causes consumption to increase. D) An increase in the price level decreases the amount of money a household needs to buy goods and raises the interest rate, which causes consumption to increase.
Which of the following is not a necessary condition for the Coase theorem?
a. Property rights are clearly defined. b. The costs of bargaining are sufficiently low. c. The government intervenes to internalize the externality. d. There are only a few parties involved.