According to the Mercantilists, governments should
A. not spend much on national defense.
B. allow for free trade unencumbered by government regulations and restrictions.
C. subsidize and encourage exports.
D. subsidize and encourage imports.
Answer: C
Economics
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The two primary explanations for the excess volatility of consumption are
A) consumers' limited life spans and credit market imperfections. B) credit market imperfections and changes in market prices. C) changes in market prices and distorting taxes. D) distorting taxes and consumers' limited life spans.
Economics
If the marginal propensity to save is equal to 0.5 in the simple Keynesian model, then a 10-unit increase in government spending will cause output to rise by
a. 5 units. b. 10 units. c. 20 units. d. 25 units. e. 40 units.
Economics