If the government decides to change the level of government spending, what happens to the value of the multiplier?
A. It becomes larger.
B. It becomes smaller.
C. It does not change.
D. It is impossible to predict.
Answer: C
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Holding all else constant, an increase in U.S. real GDP will ________ the supply for dollars in the foreign exchange market and ________ the equilibrium Mexican peso/U.S. dollar exchange rate.
A. decrease; increase B. decrease; decrease C. increase; increase D. increase; decrease
A bond will pay $10,000 to its owner in 5 years. If the relevant annual interest rate is 5%, what is the bond worth today (rounded to the nearest 100)?
A. $9,500 B. $7,800 C. $6,600 D. $1,900 E. None of the above.
Which is most likely to cause a temporary spurt in the growth of GDP that cannot be maintained in the long run?
a. An unanticipated increase in aggregate demand. b. An anticipated increase in aggregate demand. c. An increase in long run aggregate supply (LRAS). d. An increase in wage rates
Recall the Application about how worldwide trade has affected the U.S. auto industry to answer the following question(s). According to this Application, what percentage of parts in the Ford Focus came from parts suppliers in the United States and Canada in 2015?
A. 40% B. 100% C. 35% D. 70%