Expansionary fiscal policy in an open economy has a
A. greater effect than in a closed economy.
B. similar effect as in a closed economy.
C. smaller effect than in a closed economy.
D. greater effect than monetary policy.
Answer: C
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Suppose an individual has $45,000 in annual income and considering a home that they intend to finance with a $150,000 mortgage at 4% APR 30-year fixed rate loan, the real estate taxes and insurance are $2,000 per year, auto payments are $350/month, and student loans payments are $400/month.
(1) Calculate the two qualification ratios. (2) Would this individual qualify for this loan using a standard 28/36 ratio criteria? Show all work for credit.
Suppose beer producers in Munich became aware of the low price of one barrel of beer in the domestic market relative to that in the United States. What will be the impact of this price difference?
a. Beer production in Munich will decline. b. Price of beer in the domestic market will increase. c. Beer production in the U.S. will increase. d. Beer consumption in the domestic market will increase.
A subsidy is defined as
a. a payment that must be made to the government whenever a good or service is sold. b. the number of trades that are eliminated from a market when a tax is imposed. c. the difference between total revenue and total cost for a business firm. d. a payment to either the buyer or seller of a good or service, usually on a per-unit basis, when a good or service is purchased.
Which statement most accurately describes economics?
A. Economics is the study of social values a society should choose. B. Economics is the study of how people make choices to satisfy their wants. C. Economics is the study of how people make money. D. Economics is the study of how to eliminate scarcity.