The cyclical deficit is that portion of the deficit a. that results from the economy being below the natural rate of output. b. that would exist even if the economy were at its natural rate of output. c. is a function of the level of automatic stabilizers. d. both a and c. d. None of […]
Date: September 10th, 2020
If the contribution from capital growth equals 2 percent and the contribution from labor growth equals 4 percent, then GDP ________. A) will grow by 6 percent B) will grow by 8 percent C) will grow by 2 percent D) will change by an unknown percentage ANSWER D
Date: September 10th, 2020
Suppose that there is an increase in technology. The classical model predicts that a. both output and the price level rises. b. output rises and the price level remains the same. c. output rises and the price level falls. d. none of the above. ANSWER C
Date: September 10th, 2020
In the Keynesian model with a fixed money wage but a flexible price level, an increase in taxes will lower a. output and the price level, but leave the interest rate unchanged. b. output, the price level and the interest rate. c. output and the interest rate, but leave the price level unchanged. d. output […]
Date: September 10th, 2020
The post-World War II prosperity (1945–1949) was due in large part to Harry Truman’s commitment to maintaining high levels of federal expenditures after World War II (1941–45). Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
Between 1790 and 1860, wholesale prices charged by producers of commodities (a) grew steadily over the period. (b) declined steadily. (c) exhibited wild variations but increased, on average. (d) exhibited wild variations but declined, on average. ANSWER (d)
Date: September 10th, 2020
Business cycles are best categorized as (a) fluctuations in the production and employment levels in the business sector of the economy. (b) major upswings and downturns in most sectors of the economy. (c) variations in international trade. (d) all of the above. ANSWER (b)
Date: September 10th, 2020
Like the two world wars, the Korean War (1950–53) produced shortages of resources, labor and output due to large-scale foreign military deployments and demands for the production of war-related goods and services. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
In England, a system of established markets, the market overt and fairs, had been established. The purpose was to (a) provide an organized means for the exchange of produced goods or movable property such as livestock. (b) allow government officials to inspect the quality of the goods and regulate business activities. (c) provide for the […]
Date: September 10th, 2020
Automatic stabilizers drive changes in a. the total deficit. b. the cyclical deficit. c. the structural deficit. d. monetary policy. e. both b and c. ANSWER B
Date: September 10th, 2020
