Assume the interest parity condition holds and that initially i = i*. A reduction in the foreign interest rate (i*) will cause
A) an increase in the demand for the domestic currency.
B) an increase in E.
C) an expected depreciation of the domestic currency.
D) all of the above
C
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The data in the table above shows the relationship between the Joneses' total consumption and total household income. Based on these data, total consumption varies
A) directly with their total household income. B) independently of their total household income. C) inversely with their total household income. D) negatively with their income.
Refer to Table 2-4. What is Jack's opportunity cost of cultivating a garden?
A) one-half of a garden cultivated B) two lawns mowed C) two-thirds of a garden cultivated. D) one and a half lawns mowed
Policy makers who believe that the costs of unemployment are very high will tend to favor which of the following during a recessionary gap?
a. moderate fiscal stimulus, no monetary stimulus b. fiscal and monetary tightness c. moderate monetary stimulus, fiscal tightness d. strong fiscal and monetary stimulus
One of the reasons that pollution problems are as large as they are is that
A. markets let individuals and firms deplete valuable resources without charging money for doing so. B. markets are incapable of incorporating valuable resources such as air and pure water. C. governments use resources without paying for them the way that individuals and firms must. D. markets are not an efficient means to address scarcity.