According to a Classical, sound finance perspective on macroeconomics, if an economy is on an inflationary path, the government should run:
A. a budget deficit and increase spending, which will reduce output.
B. neither a surplus nor a deficit since changes in deficit spending do not affect output.
C. a budget surplus and decrease spending, which will reduce output.
D. neither a surplus nor a deficit since changes in spending affect output.
Answer: B
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The figure above shows the supply curve for soda. The market price is $1.00 per soda. The ________ price that must be offered so that the 10,000th soda is produced is ________
A) minimum; $0.50 B) minimum; $1.00 C) maximum; $0.50 D) maximum; $1.00 E) minimum; more than $0.50 but less than $1.00
Attempts by a central bank to increase bank deposits without a decrease in nominal short-term interest rates are referred to as ________
A) quantitative easing B) credit channeling C) open market operations D) liquidity provision
Quotas and tariffs both serve the purpose of
A) increasing foreign trade. B) restricting foreign trade. C) causing domestic producers to lose revenues. D) lowering prices on imported goods.
U.S. imports are
a. not added to U.S. GDP because they are produced abroad b. added to U.S. GDP because they are consumed domestically c. added to U.S. GDP because they represent an increase in inventories d. added to U.S. GDP as government purchases because the government decides what goods may be imported e. not added to U.S. GDP because they are intermediate goods