An increase in the price level, other things remaining the same, may be expected to result in ____ the consumption function.
a. a downward shift of
b. a movement along
c. an upward shift in
d. no effect on
QUESTION 2The idea that a large national debt is mortgaging the future of our children and grandchildren is misleading because:
a. it is the Federal Reserve that will be responsible for making interest payments on the debt.
b. future generations will have to bear the opportunity costs of the resources that are used today.
c. future generations will not be liable for the interest obligations of the national debt.
d. future generations will inherit the interest income as well as the interest obligations.
QUESTION 3Capital accounts are a measure of how much ____ have invested ____.
a. c and d
b. d and e
c. U.S. stockholders; in the market
d. foreign stockholders; in foreign firms
e. U.S. firms; in foreign nations
QUESTION 4Which of the following would shift the investment demand curve rightward?
a. Firms are operating their plants at less than full capacity.
b. A decrease in the interest rate.
c. A decrease in business taxes.
d. All of the above.
e. None of the above.
QUESTION 5Since 1995, the net interest payment as a percentage of GDP has:
a. declined.
b. doubled.
c. tripled.
d. quadrupled.
QUESTION 6Suppose a German bank purchases a U.S. Treasury bond. This transaction would be recorded in the:
a. capital account. b. current account.
c. goods trade balance. d. unilateral transfers.
QUESTION 7A shift in the consumption function:
a. is based on the marginal propensity to consume.
b. can be caused by a change in the price level.
c. can be caused by a change in GDP.
d. None of these.