If consumption is $6 billion, investment is $3 billion, government purchases are $1 billion, and GDP is $12 billion, then net exports must equal:
A. $22 billion.
B. $10 billion.
C. $2 billion.
D. $12 billion.
C. $2 billion.
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A simple deposit multiplier equal to two implies a required reserve ratio equal to
A) 100 percent. B) 50 percent. C) 25 percent. D) 0 percent.
One of the chief advantages of exchange rate pegging is that ________
A) a country is able to pursue an independent monetary policy over the course of the business cycle B) it can be an effective means of reducing inflation C) the currency can be used to promote export growth D) it allows the monetary authorities to actively respond to the problems of inflation and unemployment
A rational decision maker will take only those actions for which the expected marginal benefit
a. is positive b. is at its maximum level c. is greater than or equal to the expected marginal cost d. is less than the expected marginal cost e. exactly equals the expected marginal cost
The tradeoff between the inflation rate and unemployment rate is represented by the:
a. consumption function. b. misery index. c. Phillips curve. d. Keynes curve.