What happens to the aggregate demand curve in the United States if the exchange rate increases so that U.S.-made products become more expensive?
What will be an ideal response?
Net exports decrease so U.S. aggregate demand decreases.
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An overvalued exchange rate is an exchange rate:
A. that equals the number of units of a foreign currency over the number of units of domestic currency. B. at which the quantities of currencies demanded and supplied in the foreign exchange market are equal. C. that has an officially fixed value greater than its fundamental value. D. that has an officially fixed value less than its fundamental value.
What is the name of the organization that defines business cycle peaks and troughs in the United States?
A) the National Bureau of Economic Research B) the National Peak and Trough Committee C) the Bureau of Labor Statistics D) the Federal Reserve
In a world of perfect certainty, sharecropping would be less efficient than a farm owner working his own farm because
(a) sharecroppers receive only half of their marginal product. (b) paying a worker a wage gives him or her an incentive to shirk. (c) sharecroppers are exploited by landlords. (d) renting farmland concentrates risk on the renters. (e) all of the above.
A few years ago the news magazine The Economist listed some of the stranger explanations used in the past to predict presidential election outcomes
These included whether or not the hemlines of women's skirts went up or down, stock market performances, baseball World Series wins by an American League team, etc. Thinking about this problem more seriously, you decide to analyze whether or not the presidential candidate for a certain party did better if his party controlled the house. Accordingly you collect data for the last 34 presidential elections. You think of this data as comprising a population which you want to describe, rather than a sample from which you want to infer behavior of a larger population. You generate the accompanying table: Joint Distribution of Presidential Party Affiliation and Party Control of House of Representatives, 1860-1996 Democratic Control of House (Y = 0) Republican Control of House (Y = 1) Total Democratic President (X = 0) 0.412 0.030 0.441 Republican President (X = 1) 0.176 0.382 0.559 Total 0.588 0.412 1.00 (a) Interpret one of the joint probabilities and one of the marginal probabilities. (b) Compute E(X). How does this differ from E(X = 0)? Explain. (c) If you picked one of the Republican presidents at random, what is the probability that during his term the Democrats had control of the House? (d) What would the joint distribution look like under independence? Check your results by calculating the two conditional distributions and compare these to the marginal distribution. What will be an ideal response?