Today, most central banks announce their policy actions:
A. one year after the policy is put in place.
B. usually six months after the policy is put in place.
C. within a 3 to 5 year "window".
D. almost immediately.
Answer: D
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Why do current account deficits always match financial account inflows?
What will be an ideal response?
Suppose the same basket of goods costs $200 in the U.S. and 100 pounds in Britain and that the exchange rate is $3 per pound. According to purchasing power parity, if the two countries' price levels do not change, what will happen to exchange rate?
a. The pound would appreciate until the exchange rate reaches $3 per pound. b. The pound would depreciate until the exchange rate reaches $2 per pound. c. The pound would depreciate until the exchange rate reaches $0.50 per pound. d. The dollar price of a pound would remain at $10. e. The pound would appreciate until the exchange rate reaches $4 per pound.
Given the following table, how many workers should be hired to maximize profits?LaborMarginal Product LaborVMPLWage18$32$100232$128$100316$64$1004-1$-4$1005-12$-48$100
A. 1 B. 2 C. 3 D. 4
Which one of the following factors will most likely cause an increase in aggregate demand?
A. An increase in net exports. B. An increase in the real interest rate. C. A decrease in net exports due to falling incomes abroad. D. A technological development that decreases the cost of producing computer chips.