Assume that the MPC is 0.9 and investment falls by $30 billion. What is the change in real GDP?
A. ?$300 billion
B. ?$270 billion
C. ?$93 billion
D. ?$39 billion
Answer: A
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If prices in Mexico rise at a higher rate than prices in the U.S., then according to purchasing-power parity the U.S. nominal exchange rate with Mexico should rise
a. True b. False Indicate whether the statement is true or false
A country has $20 billion of domestic investment and net capital outflow of $10 billion. What is saving?
a. $10 billion b. $30 billion c. -$20 billion d. -$30 billion
A group of firms that coordinate their pricing decisions is called:
A. a monopoly. B. a duopoly. C. a cartel. D. monopolistic competition.
Three-wheel cars made in North Edsel are sold for 5000 pounds. Four-wheel cars made in South Edsel are sold for 10,000 marks. The real exchange rate between North and South Edsel is four three-wheel cars for three four-wheel cars
The nominal exchange rate between the two countries is A) 0.50 marks/pound. B) 0.66 marks/pound. C) 1.50 marks/pound. D) 2.00 marks/pound.