In the simple Keynesian model,
A. Inflation is a problem whenever demand increases.
B. Inflation is a problem whenever demand decreases.
C. Inflation becomes a problem only if demand increases at full employment.
D. Inflation is never a problem.
Answer: C
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The production function Q = 0.8X + 0.6Y exhibits
A) increasing return to scale. B) decreasing returns to scale. C) constant returns to scale. D) economies of scale.
The future value of $1 saved today is $1/(1 + r)
a. True b. False Indicate whether the statement is true or false
Fiscal policy includes all of the following EXCEPT
A) policies that influence the rate of growth of the quantity of money in circulation. B) changing taxes. C) changing government spending. D) policies that influence aggregate demand.
If a nation opens up to free trade and becomes an importer of goods, which of the following is then true?
A) The nation as a whole loses. B) Sellers gain. C) Buyers gain. D) Buyers lose.