If a country wants maximum flexibility to pursue its domestic macroeconomic goals, it:
A. should use the gold standard.
B. does not matter what type of exchange rate system it uses.
C. should use a fixed exchange rate.
D. should use a flexible exchange rate.
Answer: D
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When a commercial bank borrows from the Federal Reserve,
A) Treasury liabilities rise. B) Treasury assets rise. C) Federal Reserve assets rise. D) bank reserves fall.
What is one of the biggest benefits of trade that is hard to measure?
a. the transfer of goods from rich countries to poor countries b. the transfer of knowledge from poor countries to rich countries c. the transfer of knowledge from rich countries to poor countries d. the transfer of goods from poor countries to rich countries
An economy has no imports and no taxes. The marginal propensity to save is 0.4. A? ______ increase in autonomous expenditure increases equilibrium expenditure by? $60 billion. The multiplier is? ______.
A. ?$38 ?billion; 24 B. ?$24 ?billion; 2.50 C. ?$96 ?billion; 0.63 D. ?$150 ?billion; 2.50
Suppose you are an economic researcher, and you have access to detailed information about all of the firms in a given geographic area. You would conclude that the pollution reduction policy in that area is efficient if you observe that:
A. the cleanest firms are also the most profitable. B. all firms produce approximately the same amount of pollution. C. all firms currently use the same pollution reduction technology. D. the marginal cost of reducing pollution is the same for all firms at current emissions levels.