A rise in the domestic real interest rate would cause a ________ in net exports and a ________ in the exchange rate
A) rise; rise
B) rise; fall
C) fall; rise
D) fall; fall
C
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Speculation in exchange markets is often thought of as conducive to wild fluctuations in exchange rates. In practice it appears that speculators
a. have destabilized several currencies that were at sustainable equilibrium levels. b. have no effect in fixed rate systems. c. in fact tend to stabilize exchange rates rather than destabilize them. d. All of the above are correct.
The natural rate of unemployment is:
a. Fixed and unchanging in the long-run. b. The rate that governments should use as their goal, in the sense that they should apply prudent monetary and fiscal policies to achieve it. c. The unemployment rate to which a nation gradually moves if the real wage is free to fluctuate and the nation's actual inflation rate equals its expected inflation rate. d. Basically a long term goal that no country every really achieves, but it serves as a Northern Star for policy makers. e. None of the above.
In Exhibit 1, what is the consumer surplus depicted when the quantity is three units?
a. $4
b. $2
c. $1
d. $0
The price of beef increased by 20 percent and the quantity supplied increased by 10 percent. The supply of beef is
A) elastic. B) perfectly elastic. C) perfectly inelastic. D) inelastic. E) unit elastic.