If net exports are positive for China, it must be true that China is experiencing net outflows of capital.
Indicate whether the statement is true or false
Ques. 2The saving and investment equation holds only when the federal budget is balanced.
Indicate whether the statement is true or false
Ques. 3The gap between potential GDP and real GDP had been as large as 7 percent during the worst of the 2007-2009 recession. By 2015, the gap
A) was positive, with real GDP exceeding potential GDP.
B) had been eliminated.
C) remained at 7 percent.
D) was still nearly 3 percent.
Ques. 4If net foreign investment in the United States is positive, how must national saving and domestic investment be related? (Assume that the capital account is zero and net transfers are zero.)
A) Domestic investment can be greater than or less than national saving.
B) Domestic investment must be greater than national saving.
C) Domestic investment must be less than national saving.
D) Domestic investment and national saving must also be positive.
Ques. 5In preparing their estimates of the stimulus package's effect on GDP, Obama administration economists estimated a government purchases multiplier of 1.57.
Economist Robert Barro argues that ________, the government purchases multiplier would be lower than the administration's estimate, and economists Lawrence Christiano, Martin Eichenbaum, and Sergio Rebelo argued that ________, the multiplier would be higher than the administration's estimate.
A) during wartime; when short-term interest rates are near zero
B) during a recession; when the inflation rate is relatively low
C) when the unemployment rate is high; when the value of the dollar is depreciating against foreign currencies
D) when the federal budget is in surplus; when government transfer payments are declining
Ques. 6Of the 840 billion American Recovery and Reinvestment Act stimulus package which was enacted in 2009, the largest tax cuts occurred in which category?
A) infrastructure tax cuts B) business tax cuts
C) individual tax cuts D) energy tax cuts
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