According to UIP, when interest rates are equal, the exchange rate of the country's home currency is expected to:
a. fall.
b. remain constant.
c. rise.
d. Not enough information is provided to answer the question.
Ans: b. remain constant.
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Based on the information in the above table, what is the labor force participation rate?
What will be an ideal response?
The economic scenario of the early 2000s did not include:
a. a stock market fall. b. low interest rates. c. a strong increase in employment. d. a fall in real investment.
Which of the following variables are included in the index of leading indicators?
a. new orders placed with manufacturers, length of average workweek, permits for new housing starts b. changes in the M1 money supply, number of new credit cards, political stance of current politicians c. average worker salary, average number of children per family, current standard of living d. labor-force participation rate, household debt as a share of disposable income, the real interest rate
The aggregate demand curve shifts to the right when the Fed:
A. increases its target inflation rate, reflected by a downward shift in the Fed's policy reaction function. B. decreases real interest rates in response to inflation, but does not change its target inflation rate or the Fed's policy reaction function. C. decreases its target inflation rate, reflected by an upward shift in the Fed's policy reaction function. D. increases real interest rates in response to inflation, but does not change its target inflation rate or the Fed's policy reaction function.