Answer the following statement(s) true (T) or false (F)
1. Planned expenditure has a pronounced effect on the short-run business cycle.
2. Overall, output tends to fluctuate more than investment spending.
3. Optimistic consumer expectations can cause changes to several of the autonomous components of aggregate expenditure.
4. The expenditure multiplier applies only to changes in planned investment spending.
5. The true expenditure multiplier is usually larger than the calculated multiplier.
1. True
2. False
3. True
4. False
5. False
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When someone in a country buys an asset abroad, the transaction is recorded
A) in the current account. B) in the official settlements balance. C) in the financial account as a capital inflow. D) in the financial account as a capital outflow.
If a country grows at an average rate of 3.5 % per year over a ten year period, then its compounded growth rate over that period is roughly:
A. 41.0%. B. 35.0%. C. 32.7 %. D. 45.0 %.
Since the demand for radishes is relatively elastic, a tax on radishes would be largely borne by radish farmers.
Answer the following statement true (T) or false (F)
In the short run, if the economy is at full employment, then the quantity of real GDP
A) is equal to potential GDP, and the unemployment rate is equal to the natural unemployment rate. B) does not necessarily equal potential GDP, but the unemployment rate is equal to the natural unemployment rate. C) is equal to potential GDP, but the unemployment rate does not necessarily equal the natural unemployment rate. D) is equal to potential GDP, but the unemployment rate is less than the natural unemployment rate. E) exceeds potential GDP, and the unemployment rate is less than the natural unemployment rate.