If there is no Ricardo-Barro effect, an increase in the budget deficit
A) decreases the amount of investment.
B) increases the supply of loanable funds.
C) lowers the equilibrium real interest rate.
D) increases the amount of investment.
E) decreases the demand for loanable funds.
A
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The two ways in which deficit spending can impose a burden on future generations are
A) by requiring future generations to face lower government spending and to utilize a smaller stock of human capital. B) by requiring future generations to face higher taxes and to work with a lower accumulated stock of capital goods. C) by substituting private goods for public goods and thereby benefiting only large businesses. D) by substituting private goods for public goods and thereby shifting resources to foreign residents.
Refer to Table 17.1. The labor force participation rate for this simple economy is
A) 25%. B) 40%. C) 50%. D) 60%.
Moving along a country's PPF, a reason opportunity costs increase is that
A) unemployment decreases as a country produces more and more of one good. B) unemployment increases as a country produces more and more of one good. C) technology declines as a country produces more and more of one good. D) some resources are better suited for producing one good rather than the other. E) technology must advance in order to produce more and more of one good.
Which of the following describes a positive externality?
A) The government imposes a tax on cigarettes in order to discourage smoking among teenagers. B) People who do not attend college still benefit from others who receive a college education. C) John Henry paints the outside of his house in order to increase its market value just before he puts the house up for sale. D) Mary volunteers to drive her neighbor's children to soccer practice.