Which of the following statements is true of growth in the U.S. economy from 1950 to 2007? A) Growth resulting from physical capital > growth resulting from technology > growth resulting from human capital B) Growth resulting from technology > growth resulting from physical capital > growth resulting from human capital C) Growth resulting from […]
When government spending is less than the tax revenues during a specific time period, this is known as a A) government budget deficit. B) government budget surplus. C) balanced budget. D) public debt. ANSWER B
A government budget surplus occurs during a budget year when A) tax revenues = government spending. B) tax revenues + government spending = personal income. C) tax revenues > government spending. D) tax revenues < government spending. ANSWER C
The credit demand curve is the schedule that reports the relationship between the quantity of credit demanded and ________ in an economy, assuming all else equal. A) the average tax rate B) the annual inflation rate C) the nominal rate of interest D) the real rate of interest ANSWER D
Other things being equal, appreciation of the dollar A) increases aggregate demand in the United States, and may decrease aggregate supply by reducing the prices of imported resources. B) increases aggregate demand in the United States, and may increase aggregate supply by reducing the prices of imported resources. C) decreases aggregate demand in the United […]
When interest rates rise, the transactions demand for money usually A) decreases. B) increases. C) decreases initially and then increases to the original position. D) does not change. ANSWER A
For the U.S. economy, on an average: A) growth resulting from technology is greater than the growth resulting from human capital. B) growth resulting from technology is smaller than the growth resulting from physical capital. C) growth resulting from technology equal to the growth resulting from physical capital. D) growth resulting from technology equal to […]
Explain how savings equals investment in a closed capitalist economy? What will be an ideal response? ANSWER The national income identity is given by Y = C + I + G + NX, where, C is the consumption expenditure, I is the investment expenditure, G is the Government Spending, and NX is the net […]
If the government has a spending flow that exceeds the revenues it collects, the government will run a ________ that year. A) surplus B) deficit C) debt D) debt and a deficit ANSWER B
Which of the following statements is correct? I. A drop in the foreign exchange value of the dollar would decrease aggregate demand II. A decrease in the amount of money in circulation would increase aggregate demand A) I only B) II only C) Both I and II D) Neither I nor II ANSWER D
