A cash transfer payment is always preferred to an in-kind transfer payment of an equal size
a. True b. False
b
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Suppose that the one-year forward price of euros in terms of dollars is equal to $1.113 per euro. Further, assume that the spot exchange rate is $1.05 per euro, and the interest rate on dollar deposits is 10 percent and on euro it is 4 percent
Under these assumptions A) interest parity does not hold. B) interest parity does hold. C) it is hard to tell whether interest parity does or does not hold. D) Not enough information is given to answer the question. E) interest parity fluctuates.
If the government undertakes expansionary fiscal policy, it might:
A. increase income taxes. B. decrease income taxes. C. decrease government spending. D. increase corporate income taxes.
In the United States during the 1960s, government spending dramatically increased to fight the Vietnam War, which resulted in:
A. demand-pull inflation. B. cost-push inflation. C. a disinflationary recession. D. stagflation.
"Supply creates its own demand" implies that
A. the very act of supplying a particular level of goods and services will not necessarily equal the level of goods and services demanded. B. the government will buy up any surplus of goods and services in a country to avoid economic problems. C. the very act of demanding a particular level of goods and services necessarily equals the level of goods and services supplied. D. the very act of supplying a particular level of goods and services necessarily equals the level of goods and services demanded.