If the actual government deficit (-) is equal to -$50 billion, then:
a. Fiscal policy must be expansionary.
b. Fiscal policy could be expansionary, contractionary, or neutral.
c. Monetary policy must be expansionary.
d. Fiscal policy must be contractionary.
.B
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Consider the market for peanut butter. If there is an increase in the price of peanuts,
A) there is a decrease in the supply of peanuts. B) there is a decrease in the demand for peanut butter. C) there is an upward movement along the supply curve for peanut butter. D) there is a decrease in the supply of peanut butter. E) the supply curve for peanuts shifts rightward.
Up until World War II inflation in the U.S. ________
A) remained around zero on average B) rose and remained quite high for an extended period of time C) has gone up and down but has always remained well above zero D) increased by a factor of four every year E) decreased by 30% every year
People tend to hold more money as
A. the average price level falls. B. the interest rate falls. C. credit availability rises. D. incomes fall.
When comparing market and public sector decision making, which statement is NOT true?
A. Self-interest is the motivating force in each decision making arena. B. Collective (political) outcomes and economic outcomes may differ. C. In both decision making sectors, there are scarcity constraints. D. In both decision making sectors, majority rule is how things are done.