If the U.S. government removes tariffs it had placed on imports from countries that have been accused of deliberately undervaluing their currencies, the price of these imports will ________ and the demand for the undervalued currency will ________
A) fall; rise B) rise; rise C) rise; fall D) fall; fall
A
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If the federal funds rate is set by the Taylor rule and the inflation rate increases by 3 percentage points, everything else remaining unchanged, for a given inflation target, the federal funds rate should ________
A) increase by 3 percentage point B) decrease by 3 percentage points C) increase by 4.5 percentage points D) decrease by 1.5 percentage points
The discount rate is the
A) banks' real interest rate. B) interest rate at which the Fed will loan reserves to commercial banks. C) interest rate banks charge the Fed when the Fed borrows from the banks. D) name of the interest rate banks charge their most credit-worthy borrowers. E) interest rate paid on U.S. government securities.
An increase in the exchange rate of the U.S. dollar relative to a trading partner can result from
a. higher anticipated costs of production in the U.S. b. higher interest rates and higher inflation in the U.S. c. higher growth rates in the trading partner's economy d. a change in the terms of trade e. lower export industry productivity
If the demand for a product is perfectly inelastic, the incidence of an excise tax will be:
A. entirely on the buyer. B. mostly on the buyer. C. entirely on the seller. D. mostly on the seller.