For the capital stock of the economy to remain constant over time the amount of investment: A) must exceed the depreciated value of capital stock. B) must be less than the depreciated value of capital stock. C) must be equal to the depreciated value of capital stock times the savings rate of the economy. D) […]
Date: September 2nd, 2020
Everything else remaining unchanged, what is likely to happen to the equilibrium real interest rate and quantity of credit if the credit demand curve shifts to the right? A) Both equilibrium rate of interest and quantity of credit will decrease. B) The equilibrium rate of interest will decrease and the quantity of credit will increase. […]
Date: September 2nd, 2020
If the Fed maintains an expansionary monetary policy, ________. A) the M2 measure of money decreases B) the real interest rate increases C) banks make less loans D) bank deposits increase ANSWER D
Date: September 2nd, 2020
Which statement is TRUE about a comparison of economic freedom with political freedom? A) Economic freedom is more important than political freedom when considering positive economic growth. B) Economic freedom leads to positive economic growth while political freedom leads to negative economic growth. C) Political freedom is more important than economic freedom when considering positive […]
Date: September 2nd, 2020
For several years, the U.S. unemployment rate has been below the European unemployment rate. Offer a Keynesian explanation for this. What will be an ideal response? ANSWER The aggregate supply curve in Europe is closer to horizontal than is the case in the United States. The labor market is less flexible in Europe due […]
Date: September 2nd, 2020
The value of a country’s exports during a particular year was $610,000 and the value of its imports was $995,000. Which of the following is true? A) The country ran a fiscal deficit of $605,000 during that year. B) The country ran a trade surplus of $385,000 during that year. C) The country ran a […]
Date: September 2nd, 2020
A trade-off refers to A) sacrificing one thing for another. B) deciding who consumes the products produced in an economy. C) allowing the government and other organizations to choose for us. D) holding other variables fixed. ANSWER A
Date: September 2nd, 2020
The right to openly support and democratically select national leaders is A) political freedom. B) capital freedom. C) population freedom. D) economic freedom. ANSWER A
Date: September 2nd, 2020
The two ways in which deficit spending can impose a burden on future generations are A) by requiring future generations to face lower government spending and to utilize a smaller stock of human capital. B) by requiring future generations to face higher taxes and to work with a lower accumulated stock of capital goods. C) […]
Date: September 2nd, 2020
From 1950 until the late 1980s, the natural rate of unemployment in the United States A) trended upward. B) fell sharply as government retraining programs helped put the unemployed back to work. C) cycled up and down in tandem with the actual rate of unemployment. D) rose sharply, always exceeding the actual rate of unemployment. […]
Date: September 2nd, 2020
