An increase in the price level causes government spending to:
A. increase.
B. decrease.
C. remain unaffected.
D. increase in social welfare spending only.
C. remain unaffected.
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Suppose a decline in U.S. income causes Americans to decrease their demand for all normal goods, including those produced in Europe. How will this change affect the foreign exchange market?
a. A decrease in U.S. income will increase the U.S. demand for foreign exchange, thus increasing the dollar-per-euro exchange rate, making European goods more expensive to U.S. residents. b. A decrease in U.S. income will decrease the U.S. demand for foreign exchange, thus decreasing the dollar-per-euro exchange rate, making European goods cheaper to U.S. residents. c. A decrease in U.S. income will decrease the U.S. supply of foreign exchange, thus increasing the dollar-per-euro exchange rate, making European goods cheaper to U.S. residents. d. A decrease in U.S. income will increase the U.S. supply of foreign exchange, thus increasing the dollar-per-euro exchange rate, making European goods expensive to U.S. residents.
Which of the following is the most likely result from an increase in a country's government budget surplus?
a. higher interest rates b. lower imports c. lower net capital outflows d. lower domestic investment
If the demand for computers increases as consumers' incomes rise, then computers are:
A. a complementary good. B. an inferior good. C. a substitute good. D. a normal good.
System in which an agency such as a government determines everyone's share.
a. price floor b. price ceiling c. deficiency payment d. rationing