Which of the following options could be used to eliminate a recessionary gap?
a. Increase government spending.
b. Decrease government spending.
c. Decrease investment.
d. Increase taxes.
a
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In Figure 1 below if the economy were at Y3 then we would expect there to be:
A. an increase in production since PAE < actual output.
B. an increase in production since PAE > actual output.
C. no change in production since PAE = actual output.
D. a decrease in production since PAE < actual output.
Several writers have helped to popularize the notion that stock prices follow no discernible pattern. What is meant by a random walk, and how can you explain why people continue to invest in stocks if the random walk theory is correct?
Usually, increased government spending for war increases inflationary pressures. The principal reason that inflation occurred during the Vietnam War and not during World War II was the existence, during World War II, of
a. full employment. b. government ownership of factories. c. full production. d. wage and price controls. e. high levels of patriotism.
Which statement best describes what will happen if a poor country with little capital and a rich country with a lot of capital each add a single unit of capital?
a. The rich country will experience a relatively large increase in production, while the poor country will experience a relatively small increase in production. b. The poor country will experience a relatively large increase in production, while the rich country will experience a relatively small increase in production. c. The poor country will experience a relatively small increase in production, and the rich country will experience a relatively small increase in production. d. The poor country will experience a relatively large increase in production, and the rich country will experience a relatively large increase in production.