If expansionary fiscal policies in theUS lead to increased budget deficits what will happen to real interest rates in the US and the value of the dollar?
a. increase; increase
b. increase; decrease
c. no change; decrease
d. decrease; increase
e. decrease; decrease
Answer: a. increase; increase
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When Safeway supermarkets in the United States buys strawberries from Mexico
A) it uses dollars to pay Mexican farmers. B) it uses pesos to pay Mexican farmers. C) it may use any currency it chooses. D) the transaction shows up in the U.S. capital account.
If the demand for dog grooming increases so that the price of dog grooming rises, then number of workers hired by Doug's Dog Grooming would
A) decrease. B) increase. C) remain unchanged. D) Any of the above answers are possible.
A practice which might force employers to use more labor than they would otherwise is referred to as
A) wall propping. B) featherbedding. C) mothballing. D) yellow-dogging.
Financial intermediaries
A. Always allocate funds to the least productive investments. B. Transfer purchasing power from spenders to savers. C. Spread the risk of investment failure over many individuals. D. Increase search and information costs for savers and investors.