Which of the following policies would be most likely to reduce the rate of inflation?
A. sale of government bonds by the Federal Reserve
B. a reduction in the discount rate
C. an increase in the size of the federal budget deficit
D. a reduction in the required reserves imposed on the banking system
Answer: A
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How does an increase in the real exchange rate affect exports and imports?
A) Exports increase; imports decrease. B) Exports decrease; imports increase. C) Exports increase; imports change ambiguously. D) Exports change ambiguously; imports decrease. E) Exports increase; imports are constant.
Which of the following examples would most likely convey product quality to consumers?
a. A sweater has a high price. b. A printer is on sale. c. A shoe has many items in stock. d. A stove has brand recognition.
Use the following information to answer the next several questions:Scenario 1: Imagine that an economy produces two goods, flashlights and fishing lures. In 2015, the economy produced 70 flashlights and 40 fishing lures, and the prices of flashlights and fishing lures were $5 and $12, respectively. In 2016, the economy produced 85 flashlights and 50 fishing lures, and the prices of flashlights and fishing lures were $7 and $15, respectively. Based on the information in Scenario 1, nominal GDP grew by about ________ percent from 2015 to 2016.
A. 23 B. 31 C. 62 D. 162
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, Point E necessarily represents
A. only motorcycles being produced. B. overallocation of resources. C. an impossible production point. D. technological advancement.