Government expenditures as a share of the U.S. economy are:
a. the largest in the world.
b. the smallest in the world.
c. smaller than most Western European countries.
d. larger than Canada, France, and the United Kingdom but slightly smaller than Germany and Italy.
QUESTION 2During the 1960s, the inflation rate and the unemployment rate were inversely related.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 3Which of the following can create demand-pull inflation?
a. Excessive aggregate spending.
b. Sharply rising oil prices.
c. Higher labor costs.
d. Recessions and depressions.
QUESTION 4After 1970, the share of federal spending allocated to national defense:
a. declined sharply, while the share allocated to income security increased substantially.
b. rose sharply, while the share allocated to income security declined substantially.
c. was relatively constant, while the share allocated to income security declined modestly.
d. declined modestly, while the share allocated to income security was relatively constant.
QUESTION 5The Phillips curve represents a direct relationship between the inflation rate and the unemployment rate.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 6The likely result of an economy operating at full employment is:
a. cost-push inflation.
b. demand-pull inflation.
c. a lower rate of growth.
d. hyperinflation.
QUESTION 7The Phillips curve fails to provide a consistent explanation for macroeconomic performance in the United States in the 1960s.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 8Which of the following countries had the highest level of government expenditures as a share of GDP?
a. Sweden.
b. Japan.
c. United States.
d. Italy.
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