In order for the government to increase spending, it must increase taxes to finance that spending
a. True
b. False
Indicate whether the statement is true or false
False
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A floating exchange rate
a. is determined by the national governments involved b. remains extremely stable over long periods of time c. is determined by the actions of central banks d. is allowed to vary only within a narrow range e. adjusts in response to market forces
Which of the following is an input in the circular flow diagram for an economy with two sectors?
a. A resource labor from the household sector b. A good supplied from the firm sector c. The revenue earned by the firm sector d. The income earned by the household sector
In the United States, where do depository institutions hold their reserves?
A. in accounts with the U.S. Department of the Treasury B. either as vault cash or on reserve with Federal Reserve district banks C. in their own vaults in the form of precious metals such as gold and silver D. All reserves must be held at a Federal Reserve district bank.
The real-business-cycle theory holds that business fluctuations are caused by:
A. factors affecting aggregate demand. B. incorrectly anticipated government stabilization policies. C. significant changes in technology and resource availability. D. "stop-and-go" monetary policies.