If the expected uncovered interest differential is ________, then the expected overall return favors uncovered investing in the foreign-denominated currency.
A. unchanged
B. positive
C. negative
D. zero
Answer: B
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In the specific factor model, the effect of an increase in the productivity of labor in the production of cloth will cause a(an) ________ in the quantity of labor used to produce cloth, a(an) ________ in the quantity of labor used to produce food and
a(an) ________ in the wage rate. A) increase; decrease; increase B) decrease; increase; increase C) increase; decrease; decrease D) decrease; increase; no change E) increase; increase; no change
If a country had a nominal GDP of $800 million, and the GDP Deflator was 95, what is the real GDP?
a. $750 million b. $828 million c. $950 million d. $842 million
If workers expect inflation, and negotiate wage increases that exactly match price increases, the result is a
a. horizontal aggregate supply curve at the level of potential GDP. b. vertical aggregate supply curve at the level of potential GDP. c. horizontal aggregate demand curve at the level of potential GDP. d. vertical aggregate demand curve at the level of potential GDP.
A disadvantage associated with an Earned Income Tax Credit (EITC) program to reduce poverty is that it
a. encourages illegitimate births because single women with children receive higher payments. b. rewards laziness because it provides payments to those with low incomes regardless of their work effort. c. does not help the poor who are unemployed. d. creates unemployment by increasing the wage paid to unskilled workers above the equilibrium wage.