Holding all else constant, a decrease in U.S. real GDP will ________ the supply for dollars in the foreign exchange market and ________ the equilibrium Mexican peso/U.S. dollar exchange rate.
A. increase; decrease
B. increase; increase
C. decrease; decrease
D. decrease; increase
Answer: D
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It has been said that “economics is the science of common sense.” Is economics synonymous with common sense?
What will be an ideal response?
What would happen to aggregate demand if the federal government increased military purchases and state and local governments increased their road building budgets at the same time? a. AD would increase
b. AD would increase, because only federal government purchases affect AD. c. AD would increase only if the change in federal purchases were smaller than the change in state and local purchases. d. AD would decrease only if the change in federal purchases was smaller than the change in state and local purchases.
The distribution of income in the United States has grown substantially more unequal since about:
a. 1970 b. 1980 c. 1990 d. 2000
In an economy, for every $1600 decrease in income, spending falls by $1200. It can be concluded that the:
A. Slope of the saving schedule is 1.33 B. Slope of the saving schedule is 0.75 C. Marginal propensity to consume is 1.33 D. Marginal propensity to save is .25