What does the real exchange rate take into account that the nominal exchange rate does not?
a) The different tax rates between countries.
b) The different tariffs between countries.
c) The different price levels between countries.
d) The different transaction costs between countries.
Ans: c) The different price levels between countries.
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If autonomous expenditures increased by $10 billion, what is the change in aggregate demand at a given price level if the MPC to consume is 0.8?
a. increase by $50 billion b. increase by $100 billion c. decrease by $100 billion d. decrease by $10 billion
Using the midpoint method, the price elasticity of demand for a good is computed to be approximately 2 . Which of the following events is consistent with a 0.1 percent increase in the price of the good?
a. The quantity of the good demanded decreases from 250 to 150. b. The quantity of the good demanded decreases from 200 to 100. c. The quantity of the good demanded decreases by 0.05 percent. d. The quantity of the good demanded decreases by 0.2 percent.
If you decide not to spend $1,000 you earned at your summer job but instead intend to buy shares in a mutual fund, in terms of aggregate economic accounting you would be:
A. saving. B. transferring. C. consuming. D. investing.
Which one of the following is a familiar type of asset-backed security?
a. U.S. Treasury bonds b. movie box-office receipts c. shares of stock in corporations d. securities backed by home mortgages e. none of the above