If the fraction of U.S. government securities held by foreigners increases, _____
a. current consumption by U.S. citizens can decrease
b. current consumption by U.S. citizens can increase
c. current interest payments will increase
d. private investments will increase
e. the burden of debt on future generations will decrease
b
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The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier. B. self-correcting property. C. short-run equilibrium property. D. long-run equilibrium property.
A flexible exchange rate is also referred to as a(n):
A) open market exchange rate. B) liquid exchange rate. C) nominal exchange rate. D) floating exchange rate.
If the production possibilities frontier is a straight line,
a. its slope will equal -1 b. resources must not be used efficiently c. resources must be unemployed d. society must not be using the latest technology e. resources must be equally adaptable at producing either product
In a linear equation relating income and consumption, you know that the intercept is $1,000 and the slope of the line is .4. If income is $20,000, then consumption is:
A. $8,000 B. $9,000 C. $10,000 D. $11,000