Tight monetary policy and easy fiscal policy lead to
A) high real interest rates.
B) low real interest rates.
C) roughly unchanged real interest rates.
D) roughly unchanged real interest rates only when Ricardian equivalence holds; otherwise, low real interest rates.
A
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Sherri lives in Canada and is considering buying a new sofa. If the price level in Canada falls and the price level in the United States does not change, Canadian manufactured sofas are relatively
A) less expensive, so Sherri will likely purchase a U.S. manufactured sofa. B) less expensive, so Sherri will likely purchase a Canadian manufactured sofa. C) more expensive, so Sherri will likely purchase a U.S. manufactured sofa. D) more expensive, so Sherri will likely purchase a Canadian manufactured sofa. E) Both answers B and D could be correct depending on whether U.S. manufactured sofas were initially more expensive or less expensive than Canadian sofas.
Productivity, or output per labor hour, rises as transportation costs fall
Indicate whether the statement is true or false
All these factors affect a country's exchange rates, except
a. Inflation b. Interest rates c. Employment d. Price levels
Refer to Figure 8.3. What is the average cost of producing 290 units of output?
A. $9
B. $2,500
C. $8.62
D. $7.77