When automatic fiscal stabilizers are in place, a shock that causes a fall in the level of economic activity automatically a. results in a decline in the federal budget deficit that lessens the fall in income. b. results in a rise in the federal deficit that lessens the fall in income. c. requires the federal […]
Date: September 10th, 2020
A liquidity trap occurs when the a. LM curve is steep. b. LM curve is vertical. c. LM curve is relatively flat. d. IS curve is flat. ANSWER C
Date: September 10th, 2020
From the end of the Civil War to the start of World War I, the direction of U.S. trade (a) stayed the same. (b) was dominated by trade with Europe. (c) grew and broadened to include other countries in Asia and the Americas. (d) dwindled. ANSWER (c)
Date: September 10th, 2020
According to Ricardian Equivalence theory, a tax cut ________. A) will tend to have little economic effect B) will tend to reduce the magnitude of the trade-off between inflation and the rate of unemployment C) can be an effective policy tool in the midst of an economic downturn D) must be used in conjunction with […]
Date: September 10th, 2020
Bonds sales to finance World War II (1941–45) (a) helped finance the government’s current budget deficits. (b) helped finance, manage and eventually pay down the private debts accumulated during World War I (1914–18). (c) were loans the U.S. government made to individuals in its private sector. (d) led to higher interest rates and decreased private […]
Date: September 10th, 2020
The Second Bank of the United States was deemed unconstitutional and, therefore, its charter was not renewed. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
After World War II (1941–45), the U.S. public debt (a) remained unchanged in 1947 even though the government ran a budget surplus (government expenditures fell below revenues in 1947). (b) continued to rise even though the government ran a budget surplus at times. (c) decreased even though the government ran a budget surplus continuously. (d) […]
Date: September 10th, 2020
The colonies traded internationally with regions other than the United Kingdom. They included all except (a) Africa (b) China (c) West Indies (d) Southern Europe ANSWER (b)
Date: September 10th, 2020
According to the classical system, saving is a function of a. income. b. the real interest rate. c. the real wage. d. the profitability of firms. e. all of the above. ANSWER B
Date: September 10th, 2020
If the contribution from capital and labor growth in a given economy equals 4.0 percent and output growth equals 6.4 percent over that same period of time, then productivity growth must equal ________. A) 25.6 percent B) 10.4 percent C) 2.4 percent D) 1.6 percent ANSWER C
Date: September 10th, 2020
