Most mainstream macroeconomists oppose a strict requirement to balance the federal budget annually because they conclude that such a requirement would:
A. increase real interest rates and drive out investment spending.
B. eliminate monetary policy as a stabilization tool.
C. force government to undertake expansionary fiscal policy during inflation and
contractionary fiscal policy during recession.
D. expand the size of the federal government.
C. force government to undertake expansionary fiscal policy during inflation and
contractionary fiscal policy during recession.
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The supply of a good will tend to be highly elastic if
A) additional resources to produce the good can be obtained quickly and with no increase in cost. B) its price rises quickly and sharply when the demand increases. C) the good has few close substitutes. D) the good is generally classified as a luxury. E) the good is generally classified as a necessity.
Enforcing property rights in an economy will
A) decrease the level of foreign portfolio investment. B) raise the level of investment. C) cause the market system to work less efficiently. D) encourage corruption and expand the underground economy.
An example of a real-life rule that might constrain people's behavior is:
A. having 24 hours in a day. B. the earth's limited supply of oil. C. minimum wage legislation. D. All of these are examples of real-life rules.
Which of the following is NOT a primary determinant of the number of jobs in a nation in the long run?
A) Age and size of the population B) Labor market policies C) Macroeconomics policies D) International trade