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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An increase in the U.S. interest rate will most likely
A) reduce the attractiveness of investment in the United States. B) lead to a decrease in the value of the U.S. dollar. C) lead to an inflow of funds to the United States and an appreciation of the dollar. D) provide a stimulus to U.S. export industries.
_________________________ was an international monetary system in which the U.S. dollar was valued in gold and other exchange rates were pegged to the dollar.
a. The gold standard b. The flexible exchange rate system c. The Bretton Woods System d. none of the above
Everything that consumers purchase during a period is included as part of consumption when calculating GDP
a. True b. False
If income increases in other countries, then U.S.
A. imports will increase. B. exports will increase. C. imports will decrease. D. exports will decrease.