If the U.S. interest rate is 5% and the interest rate in Germany is 2%, and the euro is expected to appreciate by 2% over the next year, then investors would:
a. sell dollars in the spot market.
b. buy euros.
c. seek to invest in the United States.
d. seek to invest in Germany.
Answer: c. seek to invest in the United States.
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In the above figure, marginal cost and marginal revenue are equal at output
A. Q1. B. Q5. C. Q3. D. Q2.
If the propensity to hold money is 6 and the money supply is 12, then the classical aggregate demand curve is
a. P = 2Y b. P/Y = 48 c. P = 1/(2Y) d. P = 2/Y
If total production of goods and services for a given quarter is $2,000 billion (seasonally adjusted), the GDP will be reported at an annual rate of
a. $750 billion. b. $1,500 billion. c. $5,000 billion. d. $8,000 billion.
During World War II,
a. government purchases of goods and services increased fivefold. b. the economy's production increased about 25 percent. c. unemployment fell to about 5%. d. All of the above are correct.