A recession abroad would
a. increase U.S. net exports and increase aggregate demand.
b. increase U.S. net exports and increase aggregate supply.
c. reduce U.S. net exports and reduce aggregate demand.
d. reduce U.S. net exports and increase aggregate demand.
C
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If the Fed pursues an expansionary monetary policy, investment in the United States will ________ and net exports will ________
A) increase; decrease B) decrease; increase C) decrease; decrease D) increase; increase
Forward contracts are often illiquid because
A) any capital gains on them are heavily taxed, making investors reluctant to sell them. B) government regulation has not provided for a secondary market in them. C) they generally contain terms specific to the particular buyer and seller. D) the brokerage fees involved in buying and selling them are very high.
Which of the following items is (are) not considered as part of the net investment calculation?
a. installation and shipping charges b. acquisition cost of new asset c. salvage value of old equipment that is being replaced d. first year's net cash flow e. c and d
If in the short run, at the profit maximizing level of output, the average revenue curve of a competitive firm lies above the average cost curve then:
a. the firm is incurring losses. b. the firm is just able to cover its total cost. c. the firm enjoys above-normal profits. d. the firm must shut down. e. the firm is barely able to cover its variable costs.