All other things equal, an increase in government spending that is NOT funded by taxes will
A) have an undetermined effect on the current account.
B) have no effect on the current account.
C) increase the current account deficit.
D) decrease the current account deficit.
C
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If a firm is earning zero economic profit, then:
A. the owner will not be able to pay himself or herself a salary. B. the firm's accounting profit is equal to the firm's implicit costs. C. the firm will shut down in the long run, but will continue to operate in the short run. D. the firm's revenues are sufficient to pay its explicit costs, but not its implicit costs.
The Federal Reserve System was created to
A) make it easier to finance budget deficits. B) promote financial market stability. C) lower the unemployment rate. D) promote rapid economic growth.
Daring Dora holds 90% of her assets in high-technology stocks, earning 12%, and 10% in long-term government bonds, earning 6%. The expected return on her portfolio
A) is 6%. B) is 9%. C) is 11.4% D) is 12%. E) cannot be determined without knowing what the dollar value of her assets is.
If the U.S. government retires the national debt, then
A) a shift in the demand of loanable funds will cause interest rates to rise. B) a shift in the demand of loanable funds will cause interest rates to fall. C) a shift in the supply for loanable funds will cause interest rates to rise. D) a shift in the supply for loanable funds will cause interest rates to fall. E) there will be an excess supply for loanable funds.