03/11/2021

A country runs a budget deficit when which of the following occurs in a given year?

• The amount of new loans to developing nations exceeds the amount of loans paid off by developing nations

• Government spending exceeds tax revenues

• The debt owed to foreigners exceeds the debt owed to the country's citizens

• The amount borrowed exceeds the interest payment on the national debt

• Interest payments on the national debt exceed spending on goods and services

If producing each additional unit of good X required giving up ever-increasing amounts of good Y, the production possibilities curve between X and Y would be

• bowed outward

• bowed inward

• a straight line

• horizontal

• upward sloping

A change in which of the following an affect the long-run economic growth of a country?

I. The quantity and quality of a country's labor force

II. Technology

III. Spending on capital goods

• I only

• III only

• I and II only

• II and III only

• I, II, and III

What happens to production in an expansion?

• increases

• decreases

What happens to unemployment in an expansion?

• increases

• decreases

What happens to prices in an expansion?

• inflation

• deflation

What happens to production in a recession?

• increases

• decreases

What happens to unemployment in a recession?

• increases

• decreases

What happens to prices in a recession?

• inflation

• deflation

Which of these do you are think are problems that we should address in a recession? (Hint: Select only 2)

• production is too low

• unemployment is too high

• prices are decreasing