Refer to the above figure. Suppose the economy is at point B and the central bank adopts expansionary monetary policy. In the short run, this will result in
A. the economy moving towards point A.
B. the economy staying at point B.
C. the economy moving towards point C.
D. an outcome that cannot be predicted, as not enough information is given.
Answer: A
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Which of the following statements is true?
A) The main items that comprise indirect business taxes include excise taxes, income taxes, and property taxes. B) Capital consumption allowance is also known as depreciation. C) A sales tax is an example of an indirect business tax. D) b and c E) a, b, and c
If nominal wealth increases faster than real wealth:
A. real wealth must eventually decline. B. society is better off than if nominal wealth growth had matched real wealth growth. C. real wealth will eventually rise faster in order to catch up. D. asset inflation has occurred.
When deciding between domestic and foreign financial investments, investors typically consider
A) domestic and foreign inflation rates and expected changes in the exchange rate. B) domestic and foreign budget deficits. C) shifts in the relative demand for foreign and domestic goods. D) domestic and foreign interest rates and expected changes in the exchange rate.
Someone who is underemployed is someone who:
A. is working in a job for which he is overqualified. B. is working part-time, but wants full-time employment. C. could be contributing more output to society by either working more, or by working using more advanced skills he possesses but doesn't currently use. D. All of these describe someone who is underemployed.