A financial market is where people trade:
A. future claims on funds or goods.
B. current claims for future goods.
C. current goods for future funds.
D. future funds or goods for reduced current risk.
A. future claims on funds or goods.
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An economic model is a
A) realistic version of an economic environment. B) fictional representation of an entire economy. C) detailed version of an economic issue. D) simplified representation of an economic environment.
When exchange rates are__ , agreeing to wait for one week from today to engage in an international transaction carries __
a. flexible rather than fixed; less risk b. flexible rather than fixed; the same amount of risk c. flexible rather than fixed; more risk d. fixed rather than flexible; the same amount of risk
Expansionary fiscal policy in response to a negative real shock:
A. will only increase real growth and inflation a little. B. might increase inflation a little but will increase real growth a lot. C. might increase real growth a little but will increase inflation a lot. D. will increase both real growth and inflation a lot
A public debt which is owed to foreigners can be burdensome because:
A. Foreign interest rates are persistently higher than domestic interest rates B. The payment of interest reduces the volume of goods and services available for domestic uses C. The payment of interest will conflict with a nation's foreign aid programs D. The payment of interest will necessarily have a deflationary effect on prices in the paying nation