Homework Answers
d. government deficits can have no effect on international trade is the correct option.
Government budget is directly related to trade balance. Therefore, a government deficit can affect the trade balance which includes the exports and imports as well.For example, A deficit reduces the aggregate demand which affects the imports as well.
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14 Which of the following statements is false? of Select one: a. Increased government borrowing raises...
As a result of government borrowing to cover deficits, citizens increase the supply of savings to...
As a result of government borrowing to cover deficits, citizens increase the supply of savings to provide themselves with funds to pay anticipated increases in future taxes. Then it follows that increased government borrowing will O reduce private investment. increase private investment Ohave no effect of private investment. O increase interest rates. O both (a) and (d) Government borrowing will: O postpone taxation to the future. increase government interest cost. both (a) and (b) O eliminate taxes. The largest portion...
When government borrowing leads to higher interest rates, which can in turn reduce private investment, this...
When government borrowing leads to higher interest rates, which can in turn reduce private investment, this is referred to as the indirect crowding-out the direct crowding-out open economy effect none of the above
What is crowding out? O a reduction in consumption and investment spending that results from government...
What is crowding out? O a reduction in consumption and investment spending that results from government borrowing O a reduction in consumption and investment spending that results from increased international trade O a reduction in government borrowing resulting from increases in consumption and investment spending O a reduction in investment, but not consumption, that results from government borrowing O a reduction in consumption, but not investment, that results from government borrowing are a mechanism by which crowding out occurs. OIncreases...
(1) Which of the following is not a tool of fiscal policy? Government spending Taxes Tax...
(1) Which of the following is not a tool of fiscal policy? Government spending Taxes Tax incentives Private investment (2) Which of the following statements helps to explain why the economy can be slow to recover from a recession? Workers are less motivated because of reduced expectations, which reduces total output. There is not as much money in circulation to fuel new investment. Wages do not fall quickly, which delays an adjustment to a higher output level....
Question 21 2.5 pts Which of the following statements is false? corporations, unlike proprietorships and partnerships,...
Question 21 2.5 pts Which of the following statements is false? corporations, unlike proprietorships and partnerships, are subject to double taxation. bond prices will fall when lenders expect higher rates inflation in the future. the stock and bond markets are very efficient. In real life, when an individual expects the economy to expand, he should hold no nominal assets. Question 22 2.5 pts Which of the following statements is true? The relationship between risk and potential reward is inverse. Bond...
(15) All of the following would be considered capital goods, except o a dump truck. o...
(15) All of the following would be considered capital goods, except o a dump truck. o a new factory o on-the-job training. All of the above are capital goods. (16) What are the sources of savings in the economy? Business savings and household savings Private savings by households, government savings, and savings by foreigners - The difference between income and spending of households The difference between income and spending of households and businesses (17) How is the level of investment...
Which of the following statements is positive? Group of answer choices When the Federal Reserve increases...
Which of the following statements is positive? Group of answer choices When the Federal Reserve increases the money supply, interest rates decrease. Large budget deficits should be avoided. A tax cut that benefits low-income households is acceptable. Higher taxes are needed to support education. The standard of living in an economy is best measured by: Group of answer choices output per person. average labor productivity. total output. the inflation rate. If average labor productivity increases while population and the number...
Which of the following statements is true of foreign outsourcing? a. It helps circumvent government restrictions...
Which of the following statements is true of foreign outsourcing? a. It helps circumvent government restrictions on importing in closed markets. b. It drives down the cost of production. c. It is the most basic level of international market development. d. It is a specialized type of licensing. Unless they face major trade barriers, the industries in any country tend to produce products for which they have a _____, which means that they tend to turn out those goods that...
[ 4 Points Question 16 Consider a government that cuts taxes to exert an expansionary stimulus...
[ 4 Points Question 16 Consider a government that cuts taxes to exert an expansionary stimulus on the economy (government spendi is not changed). Which of the following statements is correct? 4 The longer the government waits to increase taxes, the higher the eventual increase in taxes must be in order to repay government debt. B The lower the real interest rate is, the higher the eventual increase in taxes must be in order to repay government debt. (C) The...
14. Which of the following statements would be inconsistent with Say’s law? A given value of...
14. Which of the following statements would be inconsistent with Say’s law? A given value of supply must create an equivalent value of demand in the economy. The economy has flexible prices and wages. The best way to foster an economy is through government stimulus spending. 15. What is one of the cornerstones on which neoclassical economics is built? Aggregate demand determines the size of the economy. Prices and wages lend themselves to stickiness. Unemployment is mostly cyclical. Prices and...
As a result of government borrowing to cover deficits, citizens increase the supply of savings to provide themselves with funds to pay anticipated increases in future taxes. Then it follows that increased government borrowing will O reduce private investment. increase private investment Ohave no effect of private investment. O increase interest rates. O both (a) and (d) Government borrowing will: O postpone taxation to the future. increase government interest cost. both (a) and (b) O eliminate taxes. The largest portion...
What is crowding out? O a reduction in consumption and investment spending that results from government borrowing O a reduction in consumption and investment spending that results from increased international trade O a reduction in government borrowing resulting from increases in consumption and investment spending O a reduction in investment, but not consumption, that results from government borrowing O a reduction in consumption, but not investment, that results from government borrowing are a mechanism by which crowding out occurs. OIncreases...
Question 21 2.5 pts Which of the following statements is false? corporations, unlike proprietorships and partnerships, are subject to double taxation. bond prices will fall when lenders expect higher rates inflation in the future. the stock and bond markets are very efficient. In real life, when an individual expects the economy to expand, he should hold no nominal assets. Question 22 2.5 pts Which of the following statements is true? The relationship between risk and potential reward is inverse. Bond...
(15) All of the following would be considered capital goods, except o a dump truck. o a new factory o on-the-job training. All of the above are capital goods. (16) What are the sources of savings in the economy? Business savings and household savings Private savings by households, government savings, and savings by foreigners - The difference between income and spending of households The difference between income and spending of households and businesses (17) How is the level of investment...
[ 4 Points Question 16 Consider a government that cuts taxes to exert an expansionary stimulus on the economy (government spendi is not changed). Which of the following statements is correct? 4 The longer the government waits to increase taxes, the higher the eventual increase in taxes must be in order to repay government debt. B The lower the real interest rate is, the higher the eventual increase in taxes must be in order to repay government debt. (C) The...
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