In the market for yen, a decrease in the relative safety of U.S. investments tends to
A. cause no change in equilibrium price.
B. increase demand.
C. increase excess supply.
D. decrease equilibrium price.
Answer: B
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According to the natural rate hypothesis, if the economy begins at full employment with an unemployment rate of 5 percent and then the inflation rate increases from 2 percent to 4 percent, then the economy will
A) not see any lower unemployment, even temporarily, just higher inflation. B) have lower unemployment but then return to its natural rate with an inflation rate of 4 percent. C) eventually return to its natural rate of 2 percent inflation and its natural unemployment rate of 5 percent. D) eventually return to its natural rate of 2 percent inflation and a new lower unemployment rate. E) stay at the 4 percent inflation rate and the natural unemployment rate will fall.
If England buys hockey sticks from Canada, then:
A. England has an absolute advantage over Canada in making hockey sticks. B. Canada has an absolute advantage over England in making hockey sticks. C. England has the comparative advantage over Canada in making hockey sticks. D. Canada has the comparative advantage over England in making hockey sticks.
Which of the following appears on the asset side of a bank's balance sheet?
a. Required reserve deposits. b. Loans. c. Excess reserves. d. All of these.
The government sometimes grants a firm the exclusive right to market a good or process for a fixed period of time. This is called
a. laissez-faire b. a patent c. contestable markets d. economies of scale e. monopolistic competition