Larger is always better
Indicate whether the statement is true or false
False
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Starting from long-run equilibrium, a decrease in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. higher; potential D. lower; higher
Firms free ride on the research and development of other firms when they
A) buy a firm's newly developed product, and then give it away to consumers. B) choose a level of research and development that is inefficiently high. C) license a new technology from a firm that developed the new technology. D) use knowledge other firms have developed without paying for that knowledge.
Assume that the central bank increases the reserve requirement. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the quantity of real loanable funds per time period and reserve-related (central bank) transactions in the context of the Three-Sector-Model?
a. The quantity of real loanable funds per time period rises, and reserve-related (central bank) transactions becomes more positive (or less negative). b. The quantity of real loanable funds per time period rises, and reserve-related (central bank) transactions remain the same. c. There is not enough information to determine what happens to these two macroeconomic variables. d. The quantity of real loanable funds per time period falls, and reserve-related (central bank) transactions remain the same. e. The quantity of real loanable funds per time period and reserve-related (central bank) transactions remain the same.
From uncovered interest parity, we know that when the domestic currency is expected to depreciate, the domestic interest rate should be
A) greater than the foreign interest rate B) greater than the foreign return C) less than the foreign interest rate D) less than the foriegn return