In the early 2000s, some argued that the Indian government impeded foreign investment with tariffs, investment caps, and tons of red tape. In terms of promoting or retarding economic growth, such policies:
A. increase growth because they keep people producing for the local market.
B. decrease growth because they slow the growth of capital.
C. increase growth because they stop exploitation by foreigners.
D. decrease growth because they cause inflation.
Answer: B
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The Federal Reserve's ability to control the amount of demand deposits in the system depends on its ability to
A) clear checks. B) charter national banks. C) print currency. D) regulate bank reserves.
During the last two decades, most of the surplus generated by the Social Security system was
a. used to finance current government expenditures. b. invested in government bonds that will make it possible for the federal government to pay future retirement benefits without an increase in federal taxes. c. used to pay down the national debt. d. invested in bonds offered by foreign governments and businesses that will provide a stream of future income for the finance of retirement benefits.
If tastes for foreign goods and services go up, then we would expect aggregate expenditure to:
A. remain constant. B. decrease. C. increase. D. increase and then sharply decrease more.
Explain the Phillips Curve concept and construct an example of the curve on the below graph.
What will be an ideal response?