Which of the following would increase disposable personal income?
A) a decrease in taxes paid
B) a decrease in personal income
C) a decrease in transfer payments received
D) All of the above would increase disposable income.
Ques. 2Refer to Figure 26-11. In the dynamic model of AD-AS in the figure above, if the economy is at point A in year 1 and is expected to go to point B in year 2, and the Federal Reserve pursues no policy, then at point B
A) the unemployment rate is very, very low.
B) incomes and profits are rising.
C) firms are operating above their normal capacity.
D) the economy is below full employment.
E) there is pressure on wages and prices to rise.
Ques. 3There has been a decrease in investment. As a result, real GDP will ________ in the short run, and ________ in the long run.
A) decrease; decrease further B) increase; decrease to its initial value
C) increase; increase further D) decrease; increase to its initial level
Ques. 4If property rights are not enforced in a country
A) that country will grow more rapidly because of the reduction of law suits.
B) that country's growth rate will not be affected.
C) entrepreneurs are unlikely to risk their own funds investing in such an economy.
D) the market system will still work smoothly.
Ques. 5If you want to earn a real interest rate of 3 on money you lend, and you expect that inflation will be 2, what nominal rate of interest will you charge?
A) 1 B) 5 C) 6 D) 9
Ques. 6An economy that does not have interactions in trade or finance with other economies is referred to as
A) a closed economy. B) an open economy.
C) a net foreign investment economy. D) a trade-balanced economy.
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