Increased government borrowing to cover a budget deficit results in:
a. a higher interest rate and the depreciation of the U.S. dollar.
b. a higher interest rate and the appreciation of the U.S. dollar.
c. a lower interest rate and the depreciation of the U.S. dollar.
d. a lower interest rate and the appreciation of the U.S. dollar.
e. increased purchases of foreign assets by U.S. residents.
b
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Which of the following statements is the MOST accurate? In general, under the monetary approach to the exchange rate
A) the interest rate is not independent of the money supply growth rate in the short run. B) the interest rate is independent of the money supply growth rate in the long run. C) the interest rate is not independent of the money supply growth rate in the long run, but independent in the short run. D) the interest rate is not independent of the money supply growth rate in the long run. E) the interest rate is a factor of the money supply growth rate only in the short term.
To reduce moral hazard, a firm may
A) pay workers at a piece rate. B) offer a year-end bonus if firm profits are up. C) offer stock options. D) All of the above.
Graphically, a market demand curve is found by
A) taking the average of all prices that people are willing to pay. B) summing the quantities demanded by all individuals at each price. C) summing the prices each consumer would pay for each quantity. D) taking the average of the individual demand curves.
For a linear demand curve, demand is ____ elastic at _____ prices.
B. less; higher C. more; lower D. constantly; all