The net exports effect exists because a:
a. higher price level will reduce interest rates and stimulate foreign investment.
b. lower price level will make domestically produced exports less expensive relative to foreign goods.
c. higher price level will reduce the purchasing power of money.
d. lower price level will encourage Americans to import more foreign goods.
b
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In the United States, sole proprietorship profits are taxed at the business level and then are taxed again as personal income in the form of dividend payments
Indicate whether the statement is true or false
The marginal propensity to consume out of income
A) is larger than one. B) is equal to one. C) is smaller than one. D) varies around one.
If antitrust legislation is successful, then the monopolistic firm will
A) decrease output and charge a lower price than before. B) increase output and charge a higher price than before. C) increase output and charge a lower price than before. D) decrease output and charge a higher price than before.
Event risk is the possibility that
A. the overall price level will rise faster than expected, so that the lender is repaid in dollars that are worth less than the lender expected. B. a borrower will face some circumstance that will prevent the borrower from paying the loan back. C. a major catastrophic occurrence, such as a hurricane, flood, or terrorist attack, will lower the return on the investment. D. the lender will go bankrupt before the loan is fully repaid.