Other things the same, if the U.S. interest rate rises, what happens to the net capital outflow of other countries?
As the U.S. real interest rate rises, U.S. bonds become more attractive to both domestic and foreign residents. The resulting reduction in the purchase of foreign bonds by U.S. residents and increase in the purchase of U.S bonds by foreign residents both increase the net capital outflow of foreign countries.
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Use the following figures to answer the next question.
In the diagrams, AD1 and AS1 are the "before" curves. Stagflation is depicted by ________.
A. panel (A) only B. panel (B) only C. panel (C) only D. panels (B) and (C)
Stock and Watson found that monetary policy was responsible for about ________% of the reduction in output volatility that occurred in the mid-1980s
A) 0 to 10 B) 10 to 20 C) 20 to 30 D) 30 to 40
An example of moral hazard is
a. workers working diligently even though the boss is not looking b. health care insured dieting and exercising c. drivers of safer cars turning their phones off before driving d. borrowers investing their loan proceeds differently than the bank requires
If airfares to Europe were to increase, other things equal, an economist would predict that: a. most people will not change their travel and vacation plans
b. more individuals will choose to fly to Europe because now it is a more valuable experience. c. some individuals will substitute toward other travel destinations. d. airlines will make significantly greater profits.