Assume the interest parity condition holds and that initially i = i*. A reduction in the domestic interest rate will cause
A) an increase in the demand for the domestic currency.
B) a reduction in E.
C) an expected depreciation of the domestic currency.
D) all of the above
D
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When the government's outlays equal its tax revenues, then the budget
A) is balanced. B) could be either in surplus or deficit. C) is legal only because expenditures equal tax revenues. D) is in surplus. E) is in deficit.
If the price of pork rinds falls, the substitution effect due to the price change will cause
A) an increase in the quantity of pork rinds demanded. B) a decrease in the quantity of pork rinds demanded. C) an increase in the demand for pork rinds. D) an increase in the demand for corn chips, a substitute for pork rinds.
As a plaintiff, all of the following will help you negotiate a larger settlement except which one?
A) increasing the defendant's estimate of damages B) decreasing the defendant's estimate of damages C) increasing the defendant's cost of litigation D) raising the defendant's subjective probability that you will win
Resource owners supply resources in ways that
a. maximize their utility b. maximize their income c. minimize the amount of work d. maximize the amount of work e. maximize the demand for their resource