In an economic model, an exogenous variable is
A) a stand-in for more complicated variables.
B) determined by the model itself.
C) determined outside the model.
D) a variable that has no effect on the workings of the model.
C
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When the exchange rate moves from $1 = CAD1.5 to $1 = CAD1.66, it implies:
a. the U.S. dollar has depreciated in relation to the Canadian dollar. b. U.S. imports of Canadian goods will rise. c. the dollar price of the Canadian dollar has risen. d. the Canadian dollar has appreciated in relation to the U.S. dollar. e. Canadian imports of U.S. goods will rise.
Jack has an MPC of 0.82 and Jill has an MPC of 0.78. Ceteris paribus, if the government transfers income from people who behave like Jack to people who behave like Jill,
A. Aggregate demand will increase. B. Aggregate demand will decrease. C. It is not possible to predict what will happen to aggregate demand. D. Aggregate demand will remain the same.
Which of the following is NOT an example of a negative externality?
A. inoculation against disease B. rush hour traffic C. playing a boom box loudly in a crowded park D. pollution
Suppose that Mexico has external debt, and the value of the country's currency, the peso, falls. Which of the following is true?
A) The peso value of the loans will decrease as well. B) Mexico will find it easier to pay off its external debt. C) Mexico will declare bankruptcy. D) The cost of debt service will be higher.