The effect of a sustained increase in government spending or investment on aggregate output is larger in an open economy than in a closed economy.
Answer the following statement true (T) or false (F)
False
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In rational expectations theory, the term "optimal forecast" is essentially synonymous with
A) correct forecast. B) the correct guess. C) the actual outcome. D) the best guess.
Which of the following statements is NOT true regarding subsidies?
A. Subsidies are like taxes in that they create deadweight loss. B. Subsidies are like taxes in that they reduce sales of the subsidized good. C. Subsidies are unlike taxes in that they increase sales of the subsidized good. D. Subsidies are unlike taxes in that they reduce the price that buyers pay for a good.
__________ flows from government to households
A) A transfer payment B) A tax payment C) The Laffer Curve D) Crowding out
Double-entry bookkeeping implies that:
A. aggregate income net of profits is less than the value of final output because profit can add or take away from final output. B. profits fill the gap between the sum of employee compensation, rents and interest on the one hand and the value of final output on the other hand. C. profits cannot be negative because profit equals the value of final output less costs. D. aggregate income net of profits is greater than the value of final output because profit can add or take away from final output.