The government decides to increase its expenditures by $250. The multiplier in this economy is 4 and the tax rate is 22 percent. The net effect of this expansionary fiscal policy is to:
A. increase the budget deficit by $220.
B. decrease the budget deficit by $220.
C. decrease the budget deficit by $30.
D. increase the budget deficit by $30.
Answer: D
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The security provided by the federal government on money in banks is called
A) deposit insurance. B) a hedge fund. C) Social Security. D) investment equity.
Which of the following will tend to result in the least variation in the expected real rate of return from the ownership of stocks?
A) ownership of stocks from a specific sector (for example, the technology sector) over a lengthy period of time B) ownership of a single stock over a lengthy period of time C) ownership of a single stock for a short period of time D) ownership of a diverse set of stocks (the Standard & Poor's 500, for example) over a lengthy period of time
The market for Product A has many sellers, selling identical products, each earning an economic profit of zero in the long run. The market for Product B has many sellers, selling differentiated products, each earning an economic profit of zero in the long run. Given this information, one can conclude thatÂ
A. The markets for Product A and Product B are perfectly competitive. B. The markets for Product A and Product B are monopolistically competitive. C. The market for Product A is monopolistically competitive and the market for Product B is perfectly competitive. D. The market for Product A is perfectly competitive and the market for Product B is monopolistically competitive.
Examples of external shocks are all of the following EXCEPT
A. drought. B. war. C. oil shock. D. U. S. federal tax policies.