Which of the following is likely to happen due to a contractionary monetary policy?
A) An increase in the inflation rate B) An increase in labor supply
C) An increase in the federal funds rate D) An increase in labor demand
C
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A disadvantage of functional finance is that it: a. does not focus on producing the potential level of output in an economy
b. increases the level of unemployment during recessions. c. allows chronic deficits that magnify into national debt, allowing it to reach an alarming level. d. requires that the budget is balanced even during times of war. e. magnifies fluctuations in the business cycle.
Which of the following would be recorded in the U.S. goods export account?
a. Harry, an American citizen, spends 1,000 francs on vacation in the south of France. b. A machine shop in Ohio purchases a grinder made in Italy. c. Martha receives a $50 dividend check on stock she owns in a business in Germany. d. The U.S. government subsidizes American farmers for planting corn for export. e. France purchases a new jet fighter aircraft from the Boeing Company in the United States.