Suppose the economy is initially operating at full employment. A fiscal policy action that results in an increase in the size of the budget deficit will cause which of the following in the long run?
A. a reduction in the price level.
B. change the composition of real GDP.
C. an increase in real GDP.
D. have no effect on both the level and composition of real GDP.
Answer: B
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Tesla Motors manufacturers its cars at a plant in Fremont, California
At this plant, Tesla is able to take advantage of the high level of technical training possessed by its American workers, but it also sacrifices the ability to pay lower wages had it chosen to open its plant in a low-wage country such as Mexico, India, or China. In deciding to open the Fremont plant, Tesla A) eroded some of its competitiveness in the luxury electric car market because of its increased cost of production. B) faced a trade-off between higher cost and lower precision. C) faced no trade-offs because employing more technically-skilled workers increased efficiency. D) adopted a negative technological change because it chose high-skilled workers over low-paid workers.
Does it matter how much a developing country saves? Explain why or why not. Discuss theories and evidence on whether developing countries can increase the net savings rate in the economy through public policy
In particular, consider whether this can be accomplished through increased or decreased taxation of one or more types, and increased or decreased government spending of one or more types.
Like the dual banking system for commercial banks, thrifts can have either ________ or ________ charters
A) state; federal B) state; local C) local; federal D) municipal; federal
Situation 32-1 In the early 1980s, the U.S. automobile industry managed to influence the government to negotiate a voluntary export restraint agreement with Japan that was in effect from 1981 until 1985. The predictable result was an average increase in the price of Japanese cars by about $1,000 and of U.S. cars by about $370. Also, as a result of the import quotas, 26,000 new jobs were "created"
in the U.S. automobile industry. Refer to Situation 32-l. This episode can be seen as an instance of A) rational ignorance. B) logrolling. C) special interest politics. D) a zero sum game.