The structural deficit or surplus is the
A) difference between actual government outlays and what would be government revenues if the economy were at full employment.
B) difference between actual government outlays and actual government revenues.
C) change in national debt that will result from current budgetary policies.
D) actual government budget deficit or surplus minus expenditures for capital improvements.
E) government budget deficit or surplus that would occur if the economy were at full employment.
E
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Two goods are substitutes of each other if an increase in the price of one good causes the demand for the other good to increase
a. True b. False Indicate whether the statement is true or false
In response to an adverse supply shock, suppose the Fed implements accommodating monetary policy. Which of the following occurs as a result of the accommodating monetary policy?
a. Aggregate demand shifts to the left, which increases inflation and increases unemployment in the short run. b. Aggregate demand shifts to the left, which decreases inflation and increases unemployment in the short run. c. Aggregate demand shifts to the right, which increases inflation and increases unemployment in the short run. d. Aggregate demand shifts to the right, which increases inflation and decreases unemployment in the short run.
In one year, a firm increases its production by $9 million and increases sales by $8 million. All other things in the economy remaining the same, which of the following is true?
A) GDP increases by $8 million and inventory investment decreases by $1 million. B) GDP increases by $9 million and inventory investment increases by $1 million. C) Inventory investment decreases by $1 million. D) GDP increases by $8 million and investment increases by $1 million. E) GDP increases by $17 million.
Health Bars is considering a two-year advertising campaign. The campaign will cost $60,000 at the end of each of the two years. The managers of Health Bars have estimated that the campaign will generate $42,000 a year in additional profit for the next three years. If the discount rate is 4 percent, what is the net present value of the advertising campaign?
A) $5,125 B) $3,388 C) $2,896 D) $3,952