Under perfect capital mobility and fixed exchange rates, expansionary ________ is a futile attempt because the
A. fiscal policy; LM curve effectively is vertical.
B. monetary policy; IS curve will shift to the left.
C. monetary policy; LM curve effectively is the same as the FE curve.
D. fiscal policy; interest rate does not change.
Answer: C
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In Figure 3-2, a point such as D
A. cannot be obtained with the current level of resources and technology. B. can never be obtained. C. can only be obtained by a capitalist society. D. represents a misallocation of resources.
A cereal producer finds that when Steve McNair, the quarterback for the Tennessee Titans, endorses its product, its annual income increases from $1 million to $3 million. If the interest rate is 10 percent, the present value of Steve's name is
a. $.2 million b. $3 million c. $10 million d. $20 million e. infinite
If an economy is fully utilizing its resources, it can produce more of one product only if it:
A. doubles manufacturing of the product. B. produces less of another product. C. adds more people to the labor force. D. reduces the prices of the most expensive products.
Based on the Net Interest Margin the poor bank performance in the late 1980s
A) was not the result of interest-rate movements. B) was not the result of risky loans made in the early 1980s. C) resulted from a narrowing of the gap between interest earned on assets and inters paid on liabilities. D) resulted from a huge decrease in provisions for loan losses.