In the Keynesian model of an open economy, a temporary decrease in government purchases would ________ the domestic real interest rate and ________ net desired saving (desired saving less desired investment) in the economy.
A. lower; increase
B. lower; decrease
C. raise; increase
D. raise; decrease
Answer: A
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Currently Belize, a country in Central America, has a small coffee industry but does not export any coffee
Suppose the government of Belize, in order to protect the new coffee industry to enable it to grow into a mature industry that can compete in world markets, places a tariff on the importation of coffee. What is the argument that has been used to support the tariff on coffee? A) the infant-industry argument B) the dumping argument C) protection of Belize coffee workers D) to prevent rich countries from exploiting developing countries
The degree of operating leverage is equal to the ____ change in ____ divided by the ____ change in ____
a. percentage; sales; percentage; EBIT b. unit; sales; unit; EBIT c. percentage; EBIT; percentage; sales d. unit; EBIT; unit; sales e. none of the above
Answer the question based on the following information on the banking system. Deposits at the central bank = 200 U.S. Government Securities = 600 Checking Deposits = 1,700 Loans = 800 Stockholder's Equity = 70 Other Assets = 450 Other Liabilities = 230 Borrowing from the central bank = 100 Cash in the Vault = 50 The reserve ratio on transactions deposits = 10% The banking system's excess reserves
equal: a. 80 b. 1,500 c. a multiple of 250 d. 1,450 e. None of the above is correct
If a firm or an industry is considered too big to fail, it is
A. unwise to regulate it because the regulation will slow growth. B. wise to regulate it because of the moral hazard problem. C. wise to regulate it because the regulation will make it smaller. D. unwise to regulate it because it is too big.