Suppose economic stability in the United States increases. This will tend to cause which of the following to occur?
A) The demand for U.S. dollars will rise in the foreign exchange market.
B) The supply of U.S. dollars will rise in the foreign exchange market.
C) The demand for euros will rise in the foreign exchange market.
D) Nothing will change in the foreign exchange market.
Answer: A
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The crowding-in effect results from
a. a low MPS. b. induced investment. c. induced consumption. d. rising interest rates.
Supply-siders feel that high levels of government spending:
A. assist private sector investing by creating infrastructure. B. have no impact on private sector investment. C. complement private spending. D. cause private sector investment to decline because of crowding out.
In the tourist-trap model, a consumer might pay more than the marginal cost for a good sold in a competitive market because
A) the consumer is not free to search for lower prices. B) souvenir stores are part of a nationwide cartel. C) the cost of searching for a cheaper good is more than the markup over the marginal cost. D) the difference in prices between stores will be smaller than the search cost.
Refer to the information provided in Figure 23.6 below to answer the question(s) that follow.
Figure 23.6Refer to Figure 23.6. The MPS for this saving function is
A. 0.4. B. 0.25. C. 0.2. D. 0.1.