Between 1945 and 1950, federal expenditures (a) dropped by two-fifths despite the Marshall Plan. (b) dropped by two-fifths because of dissipation of wartime expenditures. (c) increased by two-fifths because of increased spending in private consumer and business markets. (d) increased by two-fifths because of the Marshall Plan. ANSWER (a)
How can banks increase the amount of loanable funds available for private lending? (a) By selling government securities to securities dealers and the Federal Reserve System (b) By buying government securities from securities dealers and the Federal Reserve System (c) By buying stocks, property and other assets to hold on behalf of the banks (d) […]
Sovereign debt crises: a. always occur when debt/GDP ratios reach a specific point. b. mean that the optimal budget deficit is zero. c. can lead to foreign capital flight. d. can lead to exchange rate depreciation. e. both c and d. ANSWER E
By the end of the colonial period in U.S. history, slaves in the colonies (a) owned land communally. (b) had status in courts. (c) helped meet a labor need. (d) were born in Europe and shipped to the colonies. ANSWER (c)
In the real business cycle model, output and employment are a. determined by real supply-side variables. b. determined by supply and demand factors. c. always at their natural rates. d. both a and c. e. None of the above ANSWER B
An increase in the expected price level lead to a. higher money wages and lower real wages. b. higher money wages and real wages. c. no change in money wages but lower real wages. d. lower money wages and higher real wages. ANSWER B
What characterized the 1950–1962 economy (from the Korean War to the last year of John F. Kennedy’s presidency)? (a) Significant inflation (b) Deflation (c) High unemployment (d) Falling prices and wages ANSWER (a)
Of the 1790 colonist population, over 80 percent was of European origin while about 20 percent was of African origin. Indicate whether the statement is true or false ANSWER TRUE
According to the contract theory of wages, firms and workers agree on a contract that fixes a. money wages. b. real wages. c. money wages and employment. d. real wages and employment. ANSWER A
Which of the following is the most likely cause of a recession according to the real business cycle model? a. an unanticipated change in the money supply. b. an increase in taxation, government spending, and regulation. c. a fall in expected profits. d. an anticipated change in the money supply. e. none of the above. […]
