For this question, assume that policy makers are pursuing a fixed exchange rate regime and that output is initially greater than the natural level of output. The economy will tend to move toward the natural level of output when which of the following occur?
A) an increase in the price level
B) a devaluation of the currency
C) a reduction in the domestic interest rate
D) an increase in the foreign price level
E) none of the above
A
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Which of the following is NOT considered capital?
A) an assembly line at a General Motors plant B) a computer used by your instructor for presentations in class C) stocks and bonds that are sold by Pepsico D) the furniture in the President's office E) a nail gun used for building houses
The Smoot-Hawley Tariff Act of 1930 is thought to have contributed to the severity of the 1930s depression because of the rise in tariff rates and the consequential drop in private consumption, savings and investment
Indicate whether the statement is true or false
Currently, the case for increasing infrastructure spending in the United States is:
A. only compelling during economic downturns. B. not compelling during an economic downturn. C. compelling even when the economy is at full employment. D. only compelling when the economy is at full employment.
Between points b and c in the figure above, the opportunity cost of another bushel of corn is
A) 1 yard of cloth. B) 1.25 yards of cloth. C) 1.5 yards of cloth. D) 2.5 yards of cloth.