Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential
B. higher; potential
C. higher; higher
D. lower; higher
Answer: B
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Which of the following factors did not contribute to the federal budget surpluses in the 1990s?
a. Higher taxes on the rich b. More federal government spending discipline c. Market globalization d. Slower consumer spending e. Rising business optimism based on technological innovation
Suppose you get a tax refund of $20,000 and instead of spending it on items that had been on your wish list for two years, you put it all in your checking account at the First National Bank of Urbana. And if that deposit allows the bank to loan out $17,000 . then the potential money multiplier must be
a. 0.067 b. 0.117 c. 0.667 d. 1.176 e. 6.667
Because there is a trade-off between inflation and unemployment in the short run,
A. lower unemployment will typically cause inflation to fall. B. policies designed to reduce unemployment will typically set off a recession. C. policies designed to reduce inflation will cause unemployment to fall as well. D. higher inflation will generally be associated with higher unemployment. E. lower inflation will generally be associated with higher unemployment.
Which of the following non-OPEC nations have raised and lowered production in step with the OPEC nations, thus making the cartel more effective?
A. Venezuela and Nigeria B. Iran and Iraq C. Mexico and Norway D. Mexico and the United States