Using the UIP equation, what would happen to the spot rate for euros if the dollar-euro exchange rate is expected to appreciate in the future?
a. The spot rate to purchase euros would rise (dollar depreciation).
b. The spot rate to purchase euros would fall (dollar appreciation).
c. The spot rate to purchase euros would remain unchanged.
d. The spot rate to purchase euros would remain unchanged today, but rise in the future (dollar depreciation)
Ans: b. The spot rate to purchase euros would fall (dollar appreciation).
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Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
According to Edward Denison, during the 1929 and 1982 period, capital formation
a. was responsible for 25 percent of U.S. economic growth. b. amounted to 19 percent of U.S. economic growth. c. was considered the smallest source of U.S. economic growth. d. was the most important source of U.S. economic growth.
Marginal product of capital
A) is the derivative of the production function with respect to a one unit change in labor. B) is the derivative of the production function with respect to a one unit change in capital. C) is the derivative of the marginal cost curve. D) none of these choices.
Which of the following is NOT counted as an economic resource?
a. Forests. b. Mental abilities of labor. c. Stocks and bonds. d. Entrepreneurship. e. All of the above are included.