Suppose policy makers pass a budget that results in a reduction in government spending and no change in taxes. This reduction in government spending will likely
A. reduce interest rates, increase in planned investment, and increase real GDP.
B. reduce interest rates and increase planned investment.
C. generate extra tax revenues to cover the extra spending.
D. increase government borrowing and increase interest rates.
Answer: B
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The term "import" refers to:
a. a purchase of goods or services from another country. b. a business transaction between two or more domestic firms. c. a sale of goods or services to another nation. d. a tax on foreign merchandise. e. a trade agreement between two industrial countries.
If the percentage change in quantity demanded of a good is smaller than the percentage change in price, consumers are very price sensitive to the price change of the good
a. True b. False Indicate whether the statement is true or false
If a nation is going to achieve and sustain a high rate of economic growth, it must
a. prohibit low-wage foreign producers from supplying goods to the domestic market. b. have an abundant domestic supply of low cost energy resources. c. have a mechanism capable of attracting savings and channeling them into wealth-creating projects. d. impose regulations that will limit the intensity of competition among domestic firms.
The government has a budget deficit if
A) its total revenues are equal to its total expenditures. B) its total revenues are less than its total expenditures. C) its total revenues are greater than its total expenditures. D) the money supply is less than total expenditures.