Which of the following would decrease the size of a federal budget deficit?
a. a recession
b. an increase in defense spending
c. growth in real GDP
d. a decrease in tax revenues
e. an increase in transfer payments
C
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Which of the following observations is true?
A. TFC remains the same irrespective of units of output produced. B. TVC remains the same irrespective of units of output produced. C. TVC falls as the unit of output increases. D. AFC increases as output increases further and further.
If the economy is in the expansion phase of a business cycle and investment increases, when the multiplier effect kicks in, the expansion
A) is not effected. B) peaks. C) picks up speed. D) reverses. E) slows down.
Suppose the U.S. can produce 10 units of food and 5 units of clothing (or any linear combination) and Canada can produce 6 units of food and 3 units of clothing (or any linear combination)
What type of trade will occur between these two countries? Explain.
If government spending increases, which of the following would be most likely in the short and in the long run? (Both comparisons are with regard to the original price level/output combination.)
a. Short-run increases in the price level, no change in output; long-run increases in output and in the price level b. Short-run increases in output and in the price level; long-run increase in output, decrease in the price level c. Short-run decreases in output and in the price level; long-run increase in the price level, no change in output d. Short-run increases in output and in the price level; long-run increase in the price level, no change in output e. Short-run decreases in output and in the price level; long-run decreases in output and in the price level