(02.03 MC)Two friends want to start a business that they can easily dissolve when they move on to their next project. Which business structure will suit their needs best?

  (04.07 MC) Suppose a closed economy has a national income of $260 million and $535 million in private savings. Which figure would you need to calculate national savings?

(03.03 MC)Which of the following fiscal policies has the best potential for reducing unemployment?

(05.01 MC)Question refers to the excerpt below.”We have not sought to extend our territorial possessions by conquest, or our republican institutions over a reluctant people. It was the deliberate homage of each people to the great principle of our federative union. If we consider the extent of territory involved in the annexation, its prospective influence on America, the means by which it has been accomplished, springing purely from the choice of the people themselves to share the blessings of our union, the history of the world may be challenged to furnish a parallel…We may rejoice that the tranquil and pervading influence of the American principle of self-government was sufficient to defeat the purposes of British and French interference…From this example European Governments may learn how vain diplomatic arts and intrigues must ever prove upon this continent against that system of self-government which seems natural to our soil, and which will ever resist foreign interference.”Source: James Polk, from the State of the Union Address, December 2, 1845President Polk’s remarks in this address most directly show strong support for which of the following ideas?

(06.01–06.06 HC) Country A and Country B are trading partners each with a current account balance of zero. Country A’s currency is the dollar, and Country B’s currency is the euro. If real output in Country A increases, will it result in a current account deficit, surplus, or no change? Explain. Draw a graph of the foreign exchange market for the dollar of Country A. Illustrate the effect of the increase in real output in Country A on the value of its dollar compared to the euro of Country B. Now if interest rates in Country B decrease what will be the impact on the demand for the dollar of Country A? Explain. Based on part (c), what will be the effect on the value of the dollar of Country A compared to the euro of Country B?

(04.02 LC) In what situation would the expected real interest rate be negative?

(04.02 MC) A bank is currently giving out loans at an interest rate of 17% for an expected inflation rate of 3%. What is the current real interest rate in the economy?

(02.01 MC)This question refers to the following excerpt.”French pirates or corsairs, a nuisance in times of peace, had become a menace to Spanish shipping and to the Spanish economy as relations between France and Spain deteriorated in the 1550s. In 1556–60, the Crown’s revenue from the New World fell to half of its levels in the previous years, with much of the treasure stolen by French corsairs who preyed on Spanish vessels along the sea lanes that connected Spain and the Caribbean. For Spain’s homeward-bound mariners, one of those sea lanes lay along the Atlantic Coast of North America…A Spanish base on the Florida coast, then, would help protect the homebound silver fleets.”Source: David J. Weber, historian, The Spanish Frontier in North America, 1992Which of the following ideas best reflects the main point of this excerpt?

(02.03 MC) Why do economists state the unemployment rate tends to underestimate the inadequacy of labor market opportunities?

(04.05 MC)Question refers to the excerpt below.”In a free government the security for civil rights must be the same as that for religious rights. It consists in the one case in the multiplicity of interests, and in the other in the multiplicity of sects. The degree of security in both cases will depend on the number of interests and sects; and this may be presumed to depend on the extent of country and number of people comprehended under the same government. This view of the subject must particularly recommend a proper federal system to all the sincere and considerate friends of republican government, since it shows that in exact proportion as the territory of the Union may be formed into more circumscribed Confederacies, or States oppressive combinations of a majority will be facilitated: the best security, under the republican forms, for the rights of every class of citizens, will be diminished: and consequently the stability and independence of some member of the government, the only other security, must be proportionately increased. Justice is the end of government. It is the end of civil society. It ever has been and ever will be pursued until it be obtained, or until liberty be lost in the pursuit.”Source: James Madison, Federalist No. 51, 1788Emphasis in the excerpt on the importance of a federal system that could protect civil rights was underscored most clearly in the early 1800s by the