A shift to the left by the IS curve can be achieved by all of the following, EXCEPT a(n):
A) decrease in government spending.
B) increase in taxes.
C) increase in the foreign interest rate.
D) increase in the domestic price level.
Answer: C) increase in the foreign interest rate.
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If a country produces only two goods, it is possible to have a comparative advantage in the production of both those goods
Indicate whether the statement is true or false
Which of the following would be included in GDP?
a. Production of computers by IBM in Japan b. The value of a car. c. The commission on the sale of your house. d. The value of childcare provided at home by the child's mother.
The supply of foreign exchange to the United States is generated by the desire for foreigners to acquire dollars for all except one of the following reasons. Which is the exception?
a. The United States is considered a safe haven in times of political unrest. b. The dollar has long been accepted as an international medium of exchange. c. Foreigners want to buy U.S. assets. d. U.S. goods have become less attractive to foreigners. e. Foreigners wish to make cash gifts to family in the United States.
If the marginal propensity to consume (MPC) is 0.50, the value of the spending multiplier is:
a. 5. b. 1. c. 2. d. 5.