An export subsidy helps reduce the selling price of a product by allowing individual producers to charge less and still cover all of their production costs
a. True
b. False
Indicate whether the statement is true or false
True
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Which of the following is most likely to lead to an economic contraction?
a. A decrease in the average price level b. An increase in aggregate supply c. A decrease in aggregate demand d. A decrease in taxes e. An increase in transaction demand for money
During the last tax year you lent money at a nominal rate of 6 percent. Actual inflation was 1.5 percent, but people had been expecting 1 percent . This difference between actual and expected inflation
a. transferred wealth from the borrower to you and caused your after-tax real interest rate to be 0.5 percentage points higher than what you had expected. b. transferred wealth from the borrower to you and caused your after-tax real interest rate to be more than 0.5 percentage points higher than what you had expected. c. transferred wealth from you to the borrower and caused your after-tax real interest rate to be 0.5 percentage points lower than what you had expected. d. transferred wealth from you to the borrower and caused your after-tax real interest rate to be more than 0.5 percentage points lower than what you had expected.
In nations that cannot borrow in their own currencies, which exchange rate system is more destabilizing and less useful in terms of stabilizing GDP?
A) floating exchange rates B) fixed exchange rates C) banded exchange rates D) open pegs
An annual rate of inflation of 7 percent will double the price level in about 15 years.
Answer the following statement true (T) or false (F)