In the basic aggregate expenditures model, a decrease in autonomous expenditure
A. increases equilibrium output.
B. reduces equilibrium output.
C. reduces potential output.
D. increases potential output.
Answer: B
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How will an increase in the expected future exchange rate affect the current supply and demand curves for dollars?
What will be an ideal response?
In the above figure, if the market was a single-price monopoly rather than perfectly competitive, which area shows the transfer of consumer surplus from consumers to producers?
A) A + B B) C + D C) C + D + E D) E + H
Assume one investor bought a 10-year inflation-protected bond with a fixed annual real rate of 1.5 percent and another investor bought a 10-year bond without inflation protection with a nominal annual return of 4.2 percent. If inflation over the 10-year period averaged 2 percent, which investor earned a higher real return?
A. The investor who purchased the bond without inflation protection. B. Neither investor earned a positive real return. C. The investor who purchased the inflation protected bond. D. Both investors earned the same real return.
Which form of taxation do many developing countries rely on the most?
A. Import taxes or tariffs B. Corporate taxes C. Income taxes D. Sales taxes