.If the Fed unexpectedly shifts to a more expansionary monetary policy, which of the following will most likely occur in
What will be an ideal response?
a decrease in the real interest rate
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"When a company's depreciation is larger than its gross investment, net investment becomes negative and the firm's capital stock decreases." Is the previous statement correct or incorrect? Explain your answer
What will be an ideal response?
Suppose the Chinese central bank wants to keep the exchange rate of its currency value constant over time. An increase in the demand for Chinese goods by American residents will lead the Chinese central bank to
A) coordinate with the U.S. central bank in order to increase the supply of the U.S. dollar in the foreign exchange market. B) increase the demand for the Chinese currency in the foreign exchange market. C) use its dollar reserves to buy the Chinese currency in the foreign exchange market. D) sell the Chinese currency in exchange for U.S. dollars in the foreign exchange market.
Which of the following most completely describes the workings of the aggregate expenditures model?
a. If aggregate expenditures are less than aggregate output, then there is unplanned inventory accumulation, and real GDP will decrease. b. If aggregate expenditures are greater than aggregate output, then there is unplanned inventory depletion, and real GDP will increase. c. Aggregate output generates an equal amount of aggregate spending. d. Both a. and b. above are correct.
A profit-maximizing firm will only produce a positive amount of output if:
A. its total revenue is greater than or equal to its variable cost. B. its total revenue equals its total cost. C. its total revenue is greater than its fixed cost. D. its total revenue is greater than its total cost.