Refer to Figure 16-8. In the graph above, suppose the economy in Year 1 is at point A and is expected in Year 2 to be at point B. Which of the following policies could Congress and the president use to move the economy to point C?
A) decrease government purchases B) increase income taxes
C) sell Treasury bills D) increase government purchases
D
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In the Mundell-Fleming model, all of the following are true EXCEPT:
a. the intersection of the IS and LM curves determine the equilibrium exchange rate. b. the BP curves position is determined by the exchange rate. c. the policy choice between fixed and floating exchange rates shifts the BP curve. d. the extent of capital mobility determines the slope of the BP curve. e. all of the above are true.
The reason that opportunity costs arise is that
A. people have unlimited wants. B. there are no alternative decisions that could be made. C. an economy relies on money to facilitate exchange of goods and services. D. resources are scarce.
How do we find the real exchange rate from the nominal exchange rate?
In economics, the word "aggregate" refers to
A. an economy as a whole. B. the government. C. how individual households differ from each other. D. the public sector itself.