If real GDP is less that potential GDP, which of the following fiscal policies would increase real GDP?
a) only a decrease in government expenditure
b) only an increase in taxes
c) an increase in government expenditure and/or a decrease in taxes
d) a decrease in government expenditure and/or an increase in taxes
c) an increase in government expenditure and/or a decrease in taxes
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You are trying to decide whether to purchase the latest Harry Potter book online or borrow it from the library. There is no charge for borrowing a book from the library, but going to the library takes more time than ordering a book online. Regardless of how you get the book, its benefit to you is the same. If the cost of buying the book online is $13, then you should:
A. borrow the book from the library if the cost of doing so (in terms of the extra time it takes) is greater than $13. B. borrow the book from the library if the cost of doing so (in terms of the extra time it takes) is less than $13. C. borrow the book from the library because you can get it from the library for free. D. buy the book online because it takes less time.
Which of the following examples would most likely be subject to selection bias?
A. a study that randomly sampled 100 hunters in Minnesota to determine if newly implemented state hunting limits would reduce the number of hunting trips they took in the state each year B. a study that randomly sampled 100 tourists of legal drinking age on the Las Vegas Strip to determine the average amount they spend each day on alcoholic beverages while in Las Vegas C. a study that randomly sampled 100 people issued speeding tickets on the New Jersey Turnpike to determine if drivers believe the New Jersey Department of Transportation should raise the current 65 mph speed limit to 75 mph D. a study that randomly sampled 100 passengers at Chicago O'Hare International Airport to get their opinions about decreased legroom on commercial airplanes
For simplicity, the IS model assumes that neither net exports nor net taxes vary with income. A more realistic (and complicated) model would drop such assumptions. How would the behavior of the IS curve differ in the more realistic model?
What will be an ideal response?
Suppose that you purchase a $5,000 bond that pays 7 percent interest annually and matures in five years. If you expect that the inflation rate during the next five years will be 2 percent annually, what real rate of return do you expect to earn?
a. 2 percent b. 5 percent c. 7 percent d. 9 percent