At each value of the domestic interest rate, increases in the riskiness of domestic assets ________ capital inflows, ________ capital outflows, and ________ net capital inflows.
A. increase; increase; increase
B. increase; increase; decrease
C. decrease; increase; decrease
D. increase; decrease; increase
Answer: C
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If expectations are formed rationally and wages are inflexible in the short run, the short-run aggregate supply curve is
A) upward sloping. B) horizontal. C) vertical. D) relatively flat.
If a price decrease results in no change in seller's total revenue then
a. supply determined demand b. supply is unresponsive to demand c. demand is elastic d. demand is inelastic e. demand is unitary elastic
As short-term interest rates began to rise in 2005, which one of the following mortgage loan categories experienced the largest increase in default and foreclosure rates?
a. fixed rate mortgages to prime borrowers b. fixed rate mortgages to sub-prime borrowers c. adjustable rate mortgages extended to both prime and sub-prime borrowers d. adjustable rate mortgages to sub-prime borrowers only; the default and foreclosure rates of these loans extended to prime borrowers declined
Which of the following is TRUE of the relationship between U.S. trade deficits and federal government budget deficits?
A. Increases in the budget deficit tend to be associated with reductions in the trade deficit. B. Increases in the budget deficit are always associated with reductions in the trade deficit. C. Increases in the budget deficit are always associated with increases in the trade deficit. D. Increases in the budget deficit tend to be associated with increases in the trade deficit.