The key to the success of forward guidance as a monetary policy tool is:
A. credibility.
B. timing.
C. transparency.
D. a favorable exchange rate.
Answer: A
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If the demand for a good is increasing while the supply curve remains unchanged, then we will observe
A) more purchases at a higher price. B) more purchases at a lower price. C) fewer purchases at a higher price. D) fewer purchases at a lower price.
A wealthy Japanese executive decides to buy a large amount of U.S. assets. This would contribute to
a. a deficit in the U.S. current account b. a deficit in the U.S. capital account c. a surplus in the U.S. current account d. a surplus in the U.S. capital account e. a deficit in the total balance of payments
Which of the following is an example of a transfer payment?
a. wages paid to military personnel b. benefits paid to Social Security recipients c. purchase of aircraft by the Department of Defense d. payments made to a contractor for construction of a highway
Which of the following is not correct?
a. Taxes levied on sellers and taxes levied on buyers are not equivalent. b. A tax places a wedge between the price that buyers pay and the price that sellers receive. c. The wedge between the buyers' price and the sellers' price is the same, regardless of whether the tax is levied on buyers or sellers. d. In the new after-tax equilibrium, buyers and sellers share the burden of the tax.