Rosa deposits $100 in a bank account that pays an annual interest rate of 20 percent. A year later, after Rosa has accumulated $20 in interest, she withdraws her $120 . Rosa's purchasing power
a. did not change if the inflation rate was 20 percent.
b. decreased if the inflation rate was -5 percent.
c. increased if the inflation rate was 22 percent.
d. More than one of the above is correct.
a
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In order to identify differences in preferences among various countries, one would look for evidence that
a. indifference curves from different countries cross.
b. prices for goods differ among countries.
c. different market baskets are chosen among different nationalities.
d. higher income countries choose baskets with more of all goods.
When there is multicollinearity in an estimated regression equation,
a. the coefficients are likely to be small. b. the t-statistics are likely to be small even though the R2 is large. c. the coefficient of determination is likely to be small. d. the problem of omitted variables is likely. e. the error terms will tend to have a cyclical pattern.
The Federal Reserve System was established
a. at the request of farmers to keep down interest rates. b. because Americans believe in centralization of authority. c. after four severe bank panics between 1873 and 1907. d. as part of the Treasury Department.
Which of the following will enter as a credit in the U.S. balance of payments capital account?
a. the purchase of a Japanese automobile by a U.S. consumer b. the sale of Japanese electronics to an American c. the sale of an American baseball team to a Japanese industrialist d. the purchase of a Japanese electronics plant by an American industrialist