A fall in the domestic interest rate leads to capital
a. outflows and exchange rate appreciation.
b. outflows and exchange rate depreciation.
c. inflows and exchange rate depreciation.
d. inflows and exchange rate appreciation.
b
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Tying the salaries of top managers to the firm's stock price or to the profitability of the firm allows a firm's board of directors to
A) avoid disclosing financial statements to investors. B) eliminate moral hazard. C) increase asymmetric information. D) reduce the principal-agent problem.
On a diagram of the planned expenditure function Ep and the 45-degree line, we find autonomous planned spending
A) where the 45-degree line hits the vertical axis. B) at each level of output by the vertical distance between the Ep and 45-degree lines. C) where Ep intersects the vertical axis. D) at each level of income by the vertical distance from the horizontal axis up to Ep.
The country of Northland produced $1,000 billion of output in one year. The population of Northland was 50 million, of whom 30 million were employed. What was average labor productivity in Northland?
A. $20,000 B. $33,333 C. $33 D. $20
For the Fed to use money growth as a direct monetary policy target, which of the following needs to exist?
A. A stable link between the monetary base and the quantity of money B. A highly variable deposit expansion multiplier C. A predictable link between the quantity of money and the deposit expansion multiplier D. A stable link between the monetary base and the quantity of money and a predictable relationship between the quantity of money and the rate of inflation