During a recession, government deficits can grow because:
A. sales tax revenues tend to decrease because people are spending less.
B. government spending often increases as part of an expansionary fiscal policy.
C. income tax revenues tend to decrease because people are earning less.
D. All of these are true.
Answer: D
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Assuming the United States is the "domestic" country, if the real exchange rate between the United States and France increases from 1.5 to 1.8
A) the prices of U.S. goods and services have increased by 20% relative to France. B) the prices of U.S. goods and services have increased by 53% relative to France. C) the prices of U.S. goods and services have increased by 3% relative to France. D) the prices of U.S. goods and services have decreased by 16% relative to France.
Firms entering a perfectly competitive industry will cause the price of the product to
A. fall. B. rise. C. remain constant. D. become more responsive to consumer demand.
The shortest term security sold by the US is the:
A. Treasury bonds. B. Treasury notes. C. certificate of deposit. D. Treasury bills.
The Justice Department and the Federal Trade Commission are likely to oppose mergers
A. that seem likely to increase efficiency. B. that create a larger firm with economies of scale in a contestable market. C. which will help one of the merging firms out of financial difficulties. D. which threaten to reduce competition.