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.
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.
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.