A decrease in the price of inputs will cause the supply curve for a product to shift to the right
Indicate whether the statement is true or false
TRUE
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If income is equally distributed, the Gini ratio is zero
Indicate whether the statement is true or false
When technological progress occurs, the production possibilities curve
a. shifts inwards to the left b. becomes flatter in one end and steeper at the other end c. becomes steeper d. shifts outwards to the right e. does not change
Using the UIP equation, what would happen to the spot rate for euros if the interest rate on U.S. dollar deposits rises ceteris paribus?
a. The spot rate to purchase euros would rise (dollar depreciation). b. The spot rate to purchase euros would fall (dollar appreciation). c. The spot rate to purchase euros would be unchanged. d. The U.S. Federal Reserve would have to raise U.S. short-term interest rates.
The proponents of rational expectations believe that:
A. there will be a substantial time lag before people anticipate the eventual effects of a shift to a more expansionary macro-policy. B. macro-policies that stimulate demand and place upward pressure on the general level if prices will temporarily increase output and employment. C. the inflationary side effects of expansionary policies will be anticipated quickly, and therefore, even their short-run effects on real output and employment will be minimal. D. discretionary changes in macro-policy can be made in a manner that will reduce the economic ups and downs of a market economy.