The expansionary effects of an increase in government expenditures will tend to be offset, at least partially, if
a. government borrowing drives interest rates upward.
b. taxes are not also increased.
c. business decision makers and consumers become more optimistic as the result of the fiscal stimulus.
d. the economy is operating well below its full-employment capacity.
A
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Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPods or 10 tablets each year. Country B has 200 workers. Country A would be using resources efficiently if it produced:
A. (500 iPods, 100 tablets). B. (500 iPods, 150 tablets). C. (500 iPods, 200 tablets). D. (500 iPods, 250 tablets).
A large country imposes capital controls that prohibit foreign borrowing and lending by domestic residents. The country is currently running a financial account deficit. The imposition of the capital controls will cause
A. net exports to increase. B. desired national saving to fall. C. real domestic interest rates to rise. D. real world interest rates to fall.
Suppose you can fly from Charlotte to London, but only two airlines provide the service. This market would be described by
A. limited competition. B. monopoly. C. oligopoly. D. monopolistic competition.
How has the widespread availability of news on the web, which decreased the demand for newspaper workers, affected the wages of the works?
A. Wages decreased. B. Wages stayed the same. C. Wages increased. D. Wages are not affected by this.