International capital flows in an open economy have the effect of
A. reducing the power of monetary policy.
B. increasing the power of monetary policy.
C. increasing the power of monetary policy in an expansion and reducing it in a contraction.
D. reducing the power of monetary policy in an expansion and increasing it in a contraction.
Answer: B
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Suppose you could choose how many hours a week you will work and you are currently earning $50 an hour and working 40 hours a week. If you got a pay increase to $60 an hour and decided to work 45 hours, then we may conclude that your
A. income effect outweighed your substitution effect. B. substitution effect outweighed your income effect. C. substitution effect was equal to your income effect.
An ethanol producer purchases 10 futures contract of corn for delivery in December for a price of $4/bushel.What is the total gain or total loss to the ethanol producer if the price then increases to $5/bushel?
A. Total gain of $250,000. B. Total loss of $50,000. C. Total gain of $50,000. D. Total loss of $200,000.
Which of the following is false?
A. Keynes believed that the economy was basically unstable. B. The classical economists believed that full employment was a "rare occurrence". C. Keynes argued that the expected rate of profit was the most important factor in determining the level of investment demand in an economy. D. The classical economists used the laws of supply and demand to prove the validity of Say's Law.
Which of the following categories of GDP can possibly be negative?
A. Net exports and changes in private inventories only B. Net exports only C. Changes in private inventories only D. None of the categories