How does an increase in the relative price of a country's goods in terms of foreign goods, or real exchange rate, affect its balance of trade?
A) An increase in the real exchange rate reduces imports, raises exports, and increases the balance of trade.
B) An increase in the real exchange rate raises imports, reduces exports, and reduces the balance of trade.
C) An increase in the real exchange rate reduces imports, raises exports, and reduces the balance of trade.
D) An increase in the real exchange rate raises imports, reduces exports, and increases the balance of trade.
B
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According to this Application, cell phones were introduced to the public in 1983, but it took the Bureau of Labor Statistics ________ to include them in calculating the CPI
A) 3 years B) 7 years C) 15 years D) 24 years
Suppose that on average there are five more car accidents for every extra inch of snowfall in a certain region. If snowfall is graphed on the y axis and car accidents on the x axis, then if we graph this relationship, the slope of the line will be
A) 25. B) 5. C) 1/5. D) 1.
One surprising insight from viewing policy as a "game" is that
A) central bankers should project an image of being conservative on economic policy matters, regardless of their personal views. B) it is more difficult to control inflation when the central bank is highly independent. C) uncertainty over the impact of policy makes little difference in designing an optimal policy. D) money growth has little or no impact on inflation in the long run. E) decreasing money growth may substantially increase the rate of inflation in the long run.
Which of the following is included in the calculation of investment when measuring GDP?
A. changes in business inventories B. new home construction C. the purchase of new capital goods D. all of these