The marginal propensity to consume (MPC) is the fraction of additional income that is spent
Indicate whether the statement is true or false
TRUE
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Refer to Figure 19-8. The equilibrium exchange rate is originally at A, $1.25/euro. Suppose the European Central Bank pegs its currency at $1.00/euro
Speculators expect that the value of the euro will rise and this shifts the demand curve for euro to D2. If the European Central Bank abandons the peg, the equilibrium exchange rate would be A) $1.00/euro. B) $1.25/euro. C) $1.50/euro. D) $1.75/euro.
An example of a foreign direct investment (FDI) would include
A) a U.S. couple buying land for their dream retirement home in Costa Rica. B) a U.S. mutual fund manager buying shares of stock in a Brazilian oil company. C) a U.S. firm expanding its U.S. operations. D) a Chinese consumer buying an imported Japanese car. E) a wealthy Mexican buying U.S. Treasury bills.
If there is currently an inflationary gap in the economy the Fed could work toward recovery through an open market sale of government securities
a. True b. False Indicate whether the statement is true or false
Economists Novy-Marx and Rauh contend that if Chicago wanted to adequately fund its pension systems for its public workers, it would have to put on
A. a one-time tax of nearly $42,000 per household. B. an annual tax of only $42 per household. C. an annual tax of nearly $42,000 per household. D. a one-time tax of nearly $420,000 per household.