Global imbalances may be reduced by a reduction in excess savings.
Answer the following statement(s) true (T) or false (F)
Answer: True
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The ratio of the percentage change in consumption of a good divided by the percentage change in income (as measured by GDP) is known as the
A) income elasticity of demand. B) income expansion path. C) demand elasticity equivalent. D) trade effectiveness.
The buyer's reservation price for a particular good or service is the:
A. price the buyer must pay to ensure he or she gets it. B. largest price the buyer would be willing to pay for it. C. smallest price the buyer would be willing to pay for it. D. same as the market price.
A year-long drought that destroys most of the summer's crops would be considered a:
A. short-run supply shock. B. long-run demand shock. C. long-run supply shock. D. short-run demand shock.
Suppose there is a Fed purchase of bonds and simultaneous tax cut. We know with certainty that this combination of policies must cause
A) an increase in the interest rate (i). B) a reduction in i. C) an increase in output (Y). D) a reduction in Y.