If a country tries to stimulate the economy with fiscal policy, the effects will be exchange rate
A. depreciation, lower interest rates, and a small increase in aggregate demand.
B. depreciation, higher interest rates, and a small decrease in aggregate demand.
C. appreciation, lower interest rates, and a small increase in aggregate demand.
D. appreciation, higher interest rates, and a small increase in aggregate demand.
Answer: D
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In 2008, the U.S. current account balance was -$706 billion, net interest was +$119 billion, net transfers were -$128 billion, and exports were +$1,827 billion. Therefore, imports were
A) -$1,112 billion. B) +$1,112 billion. C) -$2,524 billion. D) +$2,780 billion. E) +$2,524 billion.
Today, you might be buying from a regulated natural monopoly when you purchase
A) a car, a truck, or a bicycle. B) a computer, a phone, or a camera. C) natural gas or electricity. D) a house, a condominium, or a plot of land. E) food in a grocery store or in a restaurant.
In the expectations-augmented Phillips curve, ? = ?e - 3(u - 0.05). When ? = 0.06 and ?e = 0.03, the unemployment rate is
A) 0.04. B) 0.05. C) 0.06. D) 0.07.
From Example 1.2 in the textbook, Pindyck and Rubinfeld distinguish between the mass market and dealer market for bicycles. Although there are many dealers in the U.S and only a few mass merchandisers, we should expect the dealer market to be somewhat less competitive than the mass market. Why?
A) Due to their differences in quality and performance, dealer bicycles are not close substitutes. B) The geographic extent of the market for dealer bicycles is typically small, so the individual sellers do not have many local competitors. C) Dealers are small sellers and have little control over bicycle prices. D) A and B are correct. E) B and C are correct.