If real income rises faster than absorption during a time of economic expansion, then
A) the nation will experience a current account surplus.
B) the nation will experience a current account deficit.
C) national production will increase until absorption and income are balanced.
D) the nation's imports must rise relative to its exports.
A
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The South's post-Civil War backwardness was due to all of the following except
(a) extensive wartime destruction of life and property. (b) the fiscal disaster of the Confederacy, whereby nine tenths of the state banks in the South vanished. (c) the price of cotton was increasing, as it had prior to the Civil War, thus keeping cotton profitable and discouraging investors in the South from developing a modern manufacturing system. (d) the failure of the sharecropping system to provide incentives for innovation and progress in agriculture.
The argument that foreign trade should be restricted to protect domestic employment and output is based on the idea that:
a. consumers are willing to pay higher prices for domestic goods. b. producers will not exploit reduced foreign competition by charging higher prices. c. foreign companies are more costly to deal with than domestic companies. d. sales of imports come at the expense of domestic goods and jobs.
Which of the following combinations would not produce conflicting effects on the supply of money? a. The Fed pays a higher interest rate on bank reserves and increases the required reserve ratio
b. The Fed conducts an open market purchase and lowers the discount rate. c. The Fed pays a higher interest rate on bank reserves and conducts an open market sale of government securities. d. None of the above would produce conflicting effects on the supply of money
Carla's Candy Store is maximizing profits by producing 1,000 pounds of candy per day. If Carla's fixed costs unexpectedly increase and the market price remains constant, then the profit-maximizing level of output
a. is less than 1,000 pounds b. is still 1,000 pounds c. is more than 1,000 pounds d. will increase e. cannot be determined without more information