When the absolute PPP holds, the real exchange rate is always equal to
A) 1
B) the nominal exchange rate
C) relative prices across contries
D) 1/nominal exchange rate
Ans: A) 1
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An increase in inflationary expectations __________ interest rate
A) raises the natural B) raises the nominal C) lowers the natural D) lowers the nominal
In which of the following auction types do participants have substantial information about competitors' bids?
A) Dutch auction B) sealed-bid second-price auction C) sealed-bid first-price auction D) English auction
The period 1992-200 was marked by
a. erratic changes in real GDP b. abnormally high levels of unemployment c. abnormally high levels of inflation d. sustained economic growth e. extended phase of recession
The fictional country of Alpetra increases the income tax rate so that tax revenues increase by $70 million. Government spending also increases by $70 million and consumption falls by $10 million. If GDP remains the same and Alpetra is a closed economy, then investment
a. increases by $140 million. b. increases by $70 million. c. decreases by $60 million. d. decreases by $80 million.