Intermediate goods are goods and services used:
a. by the ultimate user.
b. by state and local governments.
c. as inputs.
d. both as inputs and final goods.
c
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When a check is cleared against Bank A after being deposited at Bank B, _____
a. both Bank A's and Bank B's liabilities increase b. both Bank A's and Bank B's liabilities decrease c. Bank A's liabilities increase and Bank B's liabilities decrease d. Bank A's liabilities decrease and Bank B's liabilities increase e. there is an increase in the liabilities of the Federal Reserve
In the money market, an increase in money supply will: a. increase the demand for money at each interest rate
b. decrease the demand for money at each interest rate. c. encourage people to exchange money for interest-bearing assets. d. encourage people to exchange interest-bearing assets for money. e. increase the interest rate.
Which of the following is least likely to contribute to the volatility of investment spending?
a. Expectations about business conditions b. Changes in government spending c. Changes in tax laws d. Changes in capacity utilization e. Interest rate fluctuations
Compare the effectiveness of fiscal policy in an open economy with mobile international capital to fiscal policy in a closed economy. Why is it different? Use an appropriate diagram to illustrate your answer.
What will be an ideal response?