The Ricardo-Barro effect says that a government budget deficit leads to
A) no change in the real interest rate.
B) a lower real interest rate.
C) an increase in the quantity of investment.
D) a higher real interest rate.
E) an increase in demand for loanable funds.
A
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When Maria deposits $100 in currency in her checkable deposit at Bank of America, the immediate effect is that the quantity of M1
A) decreases. B) does not change. C) increases. D) changes, but the direction of the change depends on whether the deposit was accepted by a thrift institution or a commercial bank. E) changes only if Bank of America does not have excess reserves.
Which of the following is not a determinant of a good's price elasticity of demand?
A) the slope of the demand curve B) whether the good is a luxury or a necessity C) the share of the good in the consumer's total budget D) the passage of time
What is a fixed exchange rate and how is its value fixed?
What will be an ideal response?
Which of the following does not characterize a perfectly competitive firm that has shut down in the short run?
a. total revenue equals zero b. variable costs equal zero c. the firm suffers a loss d. fixed cost is positive e. fixed cost is zero