With floating exchange rates, the negative effects of international trade shocks on internal balance are worsened by the effects of the resulting change in the exchange rate.
Answer the following statement true (T) or false (F)
False
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According to the Application, one reason for the increase in Chinese demand for pecans was
A) the expectation of higher future prices. B) a decrease in income. C) an increase in the price of walnuts, a substitute good. D) an increase in consumer preferences.
Long run marginal cost curves are increasing for decreasing returns to scale production technologies.
Answer the following statement true (T) or false (F)
Advocates of the New Growth Theory claim that they have improved upon the neoclassical model by
a. focusing on the rate of investment, rather than the amount of investment b. adding population growth to the list of key variables c. assuming that knowledge obtained in one country would be easily available to those in othercountries d. making technological change a part of the model, rather than something brought in from theoutside e. none of the above
The federal government’s ability to repay the national debt is limited only by the
a. debt ceiling. b. incidence of taxes. c. total assets of the economy. d. political clout of the Fed’s Board of Governors.