A decline in the exchange rate could have been caused by which of these factors?
A. An increase in the domestic real interest rate
B. An increase in foreign output (income)
C. A decline in domestic output (income)
D. A decline in the world demand for domestic goods
Answer: D
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The main item in the current account balance is
A) net interest income. B) net transfers. C) net exports. D) net taxes.
Why do economists insist on emphasizing the difference between money and income? Why is this difference important in macroeconomics?
A stamp making factory is set up next to a high school. Noise from the factory makes it difficult for the kids to focus on the lessons taught. It would cost $6 million for the factory to move and $2 million for the school to move. Sound insulation for the factory would cost $1 million, while insulation for the school would cost $200,000 . According to the court, the school has the property right
Which of the following solutions is consistent with the Coase theorem? a. The factory should install sound insulation because that is cheaper than moving. b. The factory should pay for the relocation of the school. c. The factory should buy insulation for the school. d. The school should buy its own insulation.
A decrease in the price level makes consumers feel wealthier, so they purchase more. This logic helps explain why the aggregate demand curve slopes downward
a. True b. False Indicate whether the statement is true or false