In the open-economy macroeconomic model, the real exchange rate does not affect net capital outflow
a. True
b. False
Indicate whether the statement is true or false
True
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Suppose the shift from AD0 to AD1 and from AS0 to AS1 is the result of fiscal policy. Which of the policies below could lead to these shifts?
i. An increase in government expenditure ii. A tax cut iii. A decrease in government expenditure iv. A tax hike A) iv only B) i and ii C) i and iv D) i only E) iii and iv
The quantity theory of money tells us that real money balances are proportional to income, since ________
A) velocity is assumed constant in the short run B) the supply and demand of money are equal in equilibrium C) changes in the quantity of money lead to proportional changes in the price level D) all of the above E) none of the above
When car dealerships post high prices for their cars and then negotiate deals based on their estimate of how much each person will pay,
a. the dealership will lose revenue b. marginal revenue and marginal cost are being used to set prices and output c. few dealerships will be able to survive d. rent-seeking behavior will lead new dealerships to enter the market e. this is a form of price discrimination
The demand for agricultural products:
A. has a price elasticity coefficient of about 0.20 to 0.25. B. is elastic with respect to income but inelastic with respect to price. C. has been decreasing about 8 percent per year. D. has been rising more rapidly than the national income.