Interest rate differences between countries depend on
A) differences in expected inflation, but not on expected changes in the real exchange rate.
B) differences in expected changes in the real exchange rate, but not on expected inflation.
C) neither differences in expected inflation, nor on expected changes in the real exchange rate.
D) differences in expected inflation and nothing else.
E) differences in expected inflation, and on expected changes in the real exchange rate.
E
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Refer to the above figure. What is the socially optimal point of production?
A) P1 and Q1. B) P4 and Q1. C) P1 and Q4. D) P3 and Q2.
The expected value of a future payment differs from the present discounted value in that the expected value
A. Uses a lower interest rate in its calculation. B. Assumes that future payments take place over a longer period of time. C. Takes into account the possibility of nonpayment. D. Uses a higher interest rate in its calculation.
In an effort to avoid recession, the government implements a tax rebate program, effectively cutting taxes for households. We would expect this to ________.
A. affect neither aggregate supply nor aggregate demand B. reduce aggregate supply C. reduce aggregate demand D. increase aggregate demand
If a country has a trade surplus of $60 billion, which of the following can be true?
A. The country's exports are $160 billion, and its imports are $60 billion. B. The country's exports are $180 billion, and its imports are $120 billion. C. The country's exports are $110 billion, and its imports are $190 billion. D. The country's exports are $120 billion, and its imports are $180 billion.