The higher the dollar's exchange rate, the ________ the expected profit from holding dollars and so ________ dollars are supplied
A) larger; more
B) larger; fewer
C) smaller; more
D) smaller; fewer
C
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The industrial organization or (IO) perspective predicts
a. firm's profitability differs only if they are in different industries b. firms within an industry are equally profitable c. firm's profitability within industries varies widely d. Only A&B
Professor Cowen's objection to fiscal policy spending by government is:
A. the government may rush to start stimulus spending and not spend money in the most effective way possible. B. the government may put too much thought into the spending projects and confuse stimulus spending with industrial policy. C. households and businesses might realize that the boost in spending is from the government and simply save the income they receive. D. the government may not have enough money available to do an appropriate amount of spending.
Adverse selection in the market for health insurance arises because
A) many insurance companies care more about profits than they do about providing services for their customers in the event of illness. B) the federal government intervenes in insurance markets by controlling prices and reimbursement policies. C) insurance companies are not allowed to charge premiums that are high enough to insure against "worst-case" illness. D) buyers of insurance know more than insurance companies about the likelihood of an illness for which buyers want insurance.
Suppose a temporary tax cut today is combined with a rise in tax rates on the next generation of taxpayers. This long delay in increasing future taxes would not in itself cause the Ricardian equivalence proposition to fail to accurately predict the effects of the tax cut, unless the
A. parents were far-sighted in their expectations of future tax increases. B. parents saved the tax cut. C. parents failed to leave bequests. D. parents invested the tax cut.