An U.S. firm buys a new industrial sewing machine from a company located in France. Which of the following is TRUE?
I. U.S. net exports decrease.
II. U.S. investment increases.
A) only I
B) only II
C) both I and II
D) neither I nor II
C
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If the Fed increases the discount rate, commercial banks pay a ________ interest rate if they borrow money from the Fed and will therefore ________
A) higher; borrow more money from the Fed and make more loans to consumers B) higher; deposit more money into their reserves at the Fed C) lower; borrow more money from the Fed and make more loans to consumers D) lower; borrow less money from the Fed and make fewer loans to consumers E) higher; borrow less money from the Fed and make fewer loans to consumers
What are some of the criticisms that have been levied on the World Bank and the International Monetary Fund concerning adverse selection and moral hazard?
What will be an ideal response?
Consider the indifference curve-budget line model of labor supply, and assume consumption and leisure are both normal goods. A higher wage rate would result in
a. more consumption and less leisure. b. a reduction in the worker's marginal value of leisure. c. reduced consumption if the income effect is larger than the substitution effect. d. increased labor only if the substitution effect outweighs the income effect.
Consider the following sequence of events: price level ? ? demand for money ? ? equilibrium interest rate ? ? quantity of goods and services demanded ? ?his sequence explains why the
a. money-supply curve is vertical. b. aggregate-demand curve shifts leftward in response to a monetary injection. c. aggregate-demand curve shifts rightward in response to a monetary injection. d. aggregate-demand curve slopes downward.