Based on our understanding of the model presented in Chapter 3, we know that an increase in c1 (where C = c0 + c1YD) will cause
A) the ZZ line to become steeper and a given change in autonomous consumption (c0 ) to have a smaller effect on output.
B) the ZZ line to become steeper and a given change in autonomous consumption (c0 ) to have a larger effect on output.
C) the ZZ line to become flatter and a given change in autonomous consumption (c0 ) to have a smaller effect on output.
D) the ZZ line to become flatter and a given change in autonomous consumption (c0 ) to have a larger effect on output.
B
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Assume the output market adjusts more rapidly than the asset market. A point of disequilibrium that is below both AA and DD will therefore initially result in
A) an increase in output. B) a decrease in output. C) a contraction of the money supply. D) a depreciation of the home currency. E) an appreciation of the home currency.
Which entry strategy involves the least commitment with foreign firms?
A) establishing a partnership with a foreign agent or distributor B) a merger with foreign firm C) a joint venture with foreign firm D) master franchising
If people's real assets increase, then the:
a. economy will move to the right along the existing consumption function. b. economy will move to the left along the existing consumption function. c. consumption function will shift down. d. consumption function will shift up. e. investment demand curve will shift up.
When the Federal Open Market Committee (FOMC) votes on policy, it does so in the following order: the chair votes first, the vice chair votes second, and the remaining FOMC members vote based on their seniority at the Fed
Indicate whether the statement is true or false