Holding constant risk and the real returns available abroad, lower domestic real interest rates ________ capital inflows, ________ capital outflows, and ________ net capital inflows.
A. decrease; increase; decrease
B. increase; increase; decrease
C. increase; decrease; increase
D. increase; increase; increase
Answer: A
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The calculation of the final goods and services sold in an economy would NOT include
A) the purchase of a lawnmower by a household. B) General Motors' purchases of tires for new automobiles. C) Ford Motor Company's purchase of a new industrial robot to be used to produce cars. D) the purchase of a service by a household.
According to the monetarists, the rise in (M1) velocity in the mid-1990s can be attributed to
a. changes in the type of bank deposits that are available to the public. b. new legal ceilings imposed on the deposit rates financial institutions are permitted to pay depositors. c. the phasing out of legal ceilings on the deposit rates financial institutions are allowed to pay depositors. d. Both a and b e. Both a and c
If a large increase in the wage rate leads to a net increase in the use of land by a firm, then
A. the substitution effect outweighed the output effect. B. the output effect outweighed the substitution effect. C. the substitution and output effects are equal. D. there is no way to estimate the relative sizes of the substitution and output effects.
The specificity rule states that
A. Tax rates should vary according to specific characteristics of a product. B. it is more efficient to use a policy tool that is closer to the distortion that is caused by an externality. C. a government tax is the best remedial measure for an externality. D. property rights must be changed to correct for an externality.