Assuming the Marshall-Lerner condition holds and using the ZZ/Y and NX graphs, illustrate graphically and explain what effect a real depreciation will have on output, exports, imports, and net exports. Clearly label all curves and clearly label the initial and final equilibria
What will be an ideal response?
A real depreciation will cause NX to rise. The rise in NX will cause an increase in demand. As demand rises, Y will increase causing a rise in C and S. As Y increases, imports will increase as well. As shown in the text, the increase in imports will be less than the rise in exports. So, NX will be higher.
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Suppose you earn annually compounding interest of 10% (per year) on an initial investment of $1,000. Rounded to the nearest 100, what will your balance in 10 years be?
A. $11,000 B. $5,200 C. $2,600 D. $2,000 E. $1,600 F. None of the above
Which of the following statements best describes the production and allocation of resources after the United States entered World War II?
a. Government spending as a percentage of GNP during this period never exceeded the maximum level at the height of the Depression under Roosevelt's New Deal policies. b. Production shifted out closer to the production possibilities frontier, primarily as a result of technical change. c. Production shifted out toward the production possibilities frontier, primarily as a result of underutilized resources being utilized. d. Greater production of goods to support the war involved nominally higher incidents of disabling injuries in the workplace, yet not increases in the rates of disabling injuries.
A U.S. citizen's gift for famine relief in Somalia would be considered a:
a. capital inflow. b. capital outflow. c. current account transaction. d. service trade transaction.
In a PEST, how would an aging population be categorized?
Political factor Economic factor Social factor Technological factor