Describe how a sustained depreciation of the U.S. dollar over time is likely to affect U.S. net exports.
What will be an ideal response?
The depreciation of the U.S. dollar should lead to improved net exports as foreigners will find the purchasing power of their money rising relative to goods priced in U.S. dollars. Conversely, Americans will find foreign goods more expensive in terms of the U.S. dollars they need to exchange for foreign currency to buy foreign goods. Consequently, U.S. exports will rise and U.S. imports will fall, thus increasing net exports and contributing to an increase in aggregate expenditures.
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Another term for the opportunity cost of capital is
A) the normal interest rate. B) the normal rate of return. C) a normal profit. D) a normal wage rate.
Which of the following is correct?
a. Monetarists believe there is a direct link between changes in a nation's money supply and changes in expenditures. b. Monetarists believe there is no short-term link between changes in a nation's money supply and changes in expenditures. c. Keynesians believe there is no short-term link between changes in a nation's money supply and changes in expenditures. d. Keynesians believe there is a direct link between changes in a nation's money supply and changes in expenditures. e. None of the above.
Did President Obama’s $787 billion fiscal stimulus package of early 2009 work? Name several facts in support of the proposition that it did. Also, list the arguments of the skeptics.
What will be an ideal response?
When the firm is a price maker, at the quantity where profit is maximized,
A. MC>P>MR. B. MC=MR. C. MC=P=MR. D. MC.