Other things being equal, appreciation of the dollar
A. decreases aggregate demand in the United States, and may decrease aggregate supply by increasing the prices of imported resources.
B. increases aggregate demand in the United States, and may increase aggregate supply by reducing the prices of imported resources.
C. increases aggregate demand in the United States, and may decrease aggregate supply by reducing the prices of imported resources.
D. decreases aggregate demand in the United States, and may increase aggregate supply by reducing the prices of imported resources.
Answer: D
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The Federal Open Market Committee consists of
A) 12 members, each of which is the president of one of the 12 regional Federal Reserve banks. B) the seven members of the Board of Governors , the Chairman of the Fed, the U.S. Treasury Secretary, and the president of the Federal Reserve Bank of New York. C) the chairman of the Fed, the chairman of the president's council of economic advisors, the U.S. Treasury Secretary, and 4 of the 12 Federal Reserve Bank presidents who serve on a rotating basis. D) the seven members of the Board of Governors , the president of the Federal Reserve Bank of New York, and 4 other Federal Reserve Bank presidents.
Which of the following does NOT describe why Britain adopted the pegged system (the Exchange Rate Mechanism [ERM]) in 1990?
A) There were benefits to trade and other forms of cross-border exchange. B) Britain wanted to hold onto the pound as its currency. C) It was a member of the European Union and fixed rates were good for trade with other members. D) It hoped to participate in the new common currency when it was launched.
Suppose that last year you borrowed $100 at 5 percent interest to purchase a $100 pair of Nike cross-training shoes. This year you repaid the bank with interest. If the inflation rate was 10 percent last year, your purchase of the shoes would:
A. make you an inflation winner as you saved $5 on the shoes. B. make you an inflation loser as you paid $5 more than you should have for the shoes. C. not be affected at all by the inflation rate. D. be taxed according to COLA adjustments.
Welfare programs differ from social insurance programs in that welfare programs
A. Are available only to people who do not work. B. Offer benefits only to the needy. C. Are event-based. D. Have low target efficiency.