The behavior of exchange rates during the period 1999-2004 ___ predictable based on the short run asset model if we assume that changes in the money supply were assumed to be ____
a. was not; temporary
b. was; temporary
c. was not; permanent
d. was; permanent
Ans: b. was; temporary
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Homer has been saving to buy a new car in five years and expects that the car of his dreams will cost $35,000
If the interest rate is 8 percent per year, how much money should Homer have in his bank account today in order to have enough money to buy the car in 5 years? A) $1,852.28 B) $22,055.94 C) $23,820.41 D) $25,726.04
Refer to Figure 14.2. Other things equal, a decrease in inflationary expectations would best be represented by a movement from
A) point A to point B. B) point B to point A. C) point C to point B. D) point B to point C.
What is the first round effect on the components of aggregate demand, if the government increases spending (assume fixed exchange rates and financing through the real credit market)?
a. Aggregate demand increases and net exports decrease. b. Aggregate demand and net exports do not change c. Aggregate demand decreases and net exports increases. d. Aggregate demand and net exports increase. e. Aggregate demand and net exports decrease.
In which of the following ways is the private market sector similar to the public sector in terms of decision making?
A. Both sectors may use a type of "force" if necessary. B. There is competition for scarce resource in both sectors. C. Votes by individual voters are basically equal in importance with dollars spent by individuals on goods. D. Prices determine the demand for goods and services in each sector.