In the monetarist view, if the money supply has been rising too quickly for years, the resulting inflation can be brought under control by slowing money growth. This will a. quickly reduce inflation with no side effects. b. quickly reduce inflation with higher unemployment. c. increase unemployment depending upon how quickly the public changes their […]
The Smoot-Hawley Tariff Act of 1930, like any tariff act, increased the price of the taxed imported goods as well as the domestic price of U.S. goods and services produced in the industries favored by the tariff. Consequently, any tariff negatively impacts U.S. consumers by forcing them to pay higher prices. Indicate whether the statement […]
If the population of Country A grows at 3% a year but technology growth is zero, then the neoclassical model predicts that in the steady state a. the capital-to-labor ratio will increase at 3% a year. b. per capita output to grow at 3% a year. c. per capital output to grow at less than […]
Historically barriers to development in the U.S., such as the dry deserts of some of the country’s western states, have been solved by (a) only government action. (b) only private action. (c) a blend of government and private actions. (d) foreign expertise. ANSWER (c)
After the inflation of the Johnson-Nixon-Ford years (1963–1976), the Carter Administration, while still inflationary, managed to slow down the rate of advancing prices. Indicate whether the statement is true or false ANSWER FALSE
According to the balance of payments schedule, as the level of income rises a. import demand increases while export demand does not. b. export demand increases while import demand decreases. c. both import demand and export demand increase. d. both import demand and export demand decrease. ANSWER A
The common ownership of natural resources frequently leads to (a) an efficient resource allocation. (b) an even distribution of resources. (c) an uneven distribution of resources. (d) a productive use of resources. ANSWER (c)
Keynesian economists link the start of the Great Depression to the drop in construction spending and the downturn in consumption following the stock market crashes of 1929. Indicate whether the statement is true or false ANSWER TRUE
According to Friedman, changes in the level of aggregate demand a. are dominated by changes in the supply of money. b. cause the levels of output and employment to deviate from their natural rate for short periods of time. c. can cause movements of the economy away from the natural rate for at least 2 […]
The hope of “Reaganomics”—that ending inflation will stimulate economic growth—is supported by the experience of 1945–49. Indicate whether the statement is true or false ANSWER FALSE
