Which is the most likely effect upon the market for cotton of a greatly increased price for corn, which can usually be grown on land suitable for cotton cultivation?
A) The demand for cotton will decrease and the quantity exchanged will fall.
B) The demand for cotton will increase and the quantity exchanged will rise.
C) The supply of cotton will increase and the quantity exchanged will rise.
D) The supply of cotton will decrease and the quantity exchanged will fall.
E) The supply of cotton will increase and the quantity exchanged will fall.
D
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The interest rate compensates
a. bankers for their time spent on paperwork b. borrowers for their increased consumption today c. savers for consumption forgone today d. consumers for more consumption today e. the Fed for its efforts to control the money supply
A period of sustained growth in output in an economy is referred to as a(n) _____
a. expansion b. contraction c. peak d. trough e. recession
Refer to the following model.
yt = 
0 + 
0st + 1st-1 + 2st-2 + 3st-3 + ut
0+ 1+ 2+ 3 represents:
A. the short-run change in y given a temporary increase in s.
B. the short-run change in y given a permanent increase in s.
C. the long-run change in y given a permanent increase in s.
D. the long-run change in y given a temporary increase in s.
Which of the following is FALSE?
A) Capital flows today are larger mainly because economies are larger. B) The last two decades are the first time in history that a nation has borrowed more than 10 percent of its GDP. C) There are important qualitative differences between capital flows today and in the past. D) Today most international financial transactions involve buying and selling assets denominated in foreign currencies.