For this question, assume that policy makers are pursuing a fixed exchange rate regime. Now suppose that households decide to decrease consumption because of, for example, a reduction in consumer confidence. Given this information, we would expect which of the following to occur?
A) a reduction in the domestic interest rate
B) an increase in E
C) a reduction in E
D) a reduction in investment
E) none of the above
D
You might also like to view...
Which of the following statements regarding historical costs is correct?
A) Historical costs represent what the firm paid for an input when it was purchased, adjusted for inflation. B) Historical costs vary depending on the method of depreciation a firm uses. C) Historical costs are a good indicator of the current opportunity cost of a piece of capital. D) Using historical costs can cause true economic profit to be under or over stated.
Max has allocated $100 toward meats for his barbecue. His budget line and an indifference map are shown in the above figure. What happens if Max's mother gives him 10 pounds of burger?
A) Max would have preferred receiving the dollar value of the burger. B) Max is indifferent between this gift and the dollar value of the burger. C) Max prefers this gift to the dollar value of the burger. D) None of the above.
When the Fed's chairman, Alan Greenspan, expresses his concern about economic conditions and warns about possible economic problems, he is using
a. one of the most effective tools of monetary policy b. or rather misusing his position because Fed members should not express personal views on policy c. the media to set his policies against the government's, otherwise he would not have gone public with them d. the media to demonstrate that the Fed and government are planning consistent monetary and fiscal policies e. moral suasion
The law passed by Congress in 1914 that was designed to sharpen or define further the vagueness of the Sherman Act is called
A. the Robinson-Patman Act. B. the Wheeler-Lea Act. C. the Federal Trade Commission Act. D. the Clayton Act.