Which of the following would be most likely to cause an appreciation of the dollar relative to foreign currencies?
a. higher domestic interest rates
b. a reduction in the rate of inflation abroad
c. a shift to a more expansionary monetary policy
d. rapid growth of income in the United States
A
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Japan experienced periods of deflation — a declining price level — during the 1990s. During a deflationary period, which would be higher: nominal GDP or real GDP? Why? Assume that the base year of choice is prior to the deflationary period
What will be an ideal response?
If you purchase a Treasury bond, the Treasury bond is
A) an asset to you as well as an asset to the U.S. government. B) an asset to you, but a liability to the U.S. government. C) a liability to you, but an asset to the U.S. government. D) a liability to you as well as a liability to the U.S. government.
Suppose a firm's production function is given by Q = F(L, K) = 5LK, where L is the amount of labor and K is the amount of capital. The wage rate is $100 per unit of labor and the rental rate of capital is $50 per unit of capital. a. What is the least-cost combination of capital and labor if the firm produces 1000 units of output? b. What is the firm's long run cost function? c. If the firm currently uses 10 units of capital, what is its short-run cost function?
What will be an ideal response?
When countries specialize in producing those goods in which they have ________, they maximize their combined output and allocate their resources more efficiently.
A. a greater demand B. export subsidies from the government C. an absolute advantage D. a comparative advantage