A decrease in the real interest rate in the U.S. will cause net exports to:
A. increase because exports will remain constant but imports will decrease.
B. decrease because exports will increase but imports will increase.
C. increase because exports will increase and imports will decrease.
D. decrease because exports will decrease and imports will increase.
Answer: C
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Measuring "y" on the vertical axis and "x" on the horizontal axis, convexity of indifference curves implies that the MRS of "y" for "x"
A) is decreasing as "x" increases. B) is increasing as "x" increases. C) is constant as "x" increases. D) cannot be calculated for large levels of "x".
The international financial market moved towards equilibrium under the gold standard due to
A) shifts in exchange rates caused by changes in supply and demand for foreign exchange. B) changes in interest rates. C) negotiations among central banks. D) flows of gold among countries.
The largest component of aggregate expenditure is
a. consumption spending b. government purchases c. net exports d. capital expenditures e. investment spending
What determines the proportion of a unit excise tax that will be passed on to consumers in the form of higher prices?
A. the degree to which quantity demanded and supplied of the good respond to price changes B. the nature of the projects funded by the tax C. the popularity of the tax D. the number of additional taxes that consumers have to pay