World War II increased the amount of government spending and economic intervention in the United States.
Answer the following statement true (T) or false (F)
True
Due to the costs involved in the war, and the need to accommodate returning veterans, government spending increased dramatically, first dropping right after the war, then gradually increasing for the next four decades.
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If the government purchases multiplier equals 2, and real GDP is $14 trillion with potential real GDP $14.5 trillion, then government purchases would need to increase by ________ to restore the economy to potential real GDP
A) $7.25 trillion B) $1 trillion C) $500 billion D) $250 billion
A system in which governments intervene in foreign exchange markets to limit but not eliminate exchange rate fluctuations is referred to as
A. Balance-of-payments exchange rates. B. Managed exchange rates. C. Speculative exchange rates. D. Marginal exchange rates.
Which of the following does this equation show?
a. inelastic supply
b. inelastic demand
c. elastic supply
d. elastic demand
Marking to market is a process that:
A. involves a transfer of risk. B. ensures that the buyers and sellers receive what the contract promises. C. buyers and sellers can request for an additional fee when the contract is created. D. always requires the sellers of contracts to transfer funds to the buyers of contracts.