For this question, assume that the economy is operating in a fixed exchange rate regime and that perfect capital mobility exists. Given this information, which of the following will occur?
A) The domestic and foreign interest rates must be equal.
B) The central bank cannot use monetary policy to affect domestic output.
C) An expansionary fiscal policy will require that the central bank increase the money supply.
D) all of the above
E) none of the above
D
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Within the Keynesian aggregate expenditure-output model, if an economy operates below full employment:
a. a reduction in wage rates and resource prices will soon restore full-employment equilibrium. b. a reduction in the real interest rate will soon restore full-employment equilibrium. c. an increase in the real interest rate will soon restore full-employment equilibrium. d. the economy may remain below full employment unless aggregate expenditures increase.
Which of the following situations will arise in the domestic market following the imposition of an import ban?
A. imports increase, domestic production increases, prices increase B. imports increase, domestic production decreases, prices decrease C. imports decrease, domestic production increases, prices increase D. imports decrease, domestic production increases, prices decrease
Lower prices are a signal of the scarcity of a resource.
Answer the following statement true (T) or false (F)
When firms form a cartel in an oligopoly market, the total output is always the same as if the market were perfectly competitive
a. True b. False Indicate whether the statement is true or false