If the country of Deficitland is experiencing trade deficits, they are more likely to cut imports of
a. beef
b. cocoa
c. coffee
d. capital goods
e. soybeans
D
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Protectionism may fail to reduce a current account deficit because it
a. depreciates the dollar. b. invites retaliation, which hurts exports. c. encourages exports. d. does not reduce imports.
A monetary growth rule means that
A) the Fed will lower interest rates if it thinks a recession is on the horizon. B) the Fed will raise interest rates if it thinks the economy is growing faster than potential. C) the money supply should grow at a constant rate. D) the money supply should grow in response to economic conditions.
A major corporation hires high school students on a part-time basis. It offers a reward of $5,000 to any of its high school seniors who graduate college in four years
What is the present value of that reward to a student who just finished her junior year of high school, assuming a nominal rate of interest of 8%?
At the time of Elise's 20 year high school reunion she was earning $50,000 and the CPI was 80. Now that it is time for her to attend her 25 year high school reunion, Elise's income has risen to $80,000 and the CPI is 150. At her 25 year reunion, can Elise rightfully brag that her real income has risen since the last time she saw her former classmates five years ago?
A) Yes, Elise's real income rose during that 5 year period. B) No, Elise's real income fell during that 5 year period. C) No, Elise's real income remained constant during that 5 year period. D) It is impossible to determine what happened to Elise's real income.