Assume that the expectation of declining housing prices cause households to reduce their demand for new houses and the financing that accompanies it. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and GDP Price Index in the context of the Three-Sector-Model?
a. The real risk-free interest rate and GDP Price Index remain the same.
b. The real risk-free interest rate falls, and GDP Price Index falls.
c. The real risk-free interest rate falls, and GDP Price Index stays the same.
d. The real risk-free interest rate rises, and GDP Price Index falls.
e. The real risk-free interest rate rises, and GDP Price Index rises.
.B
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A restaurant buys fish to offer as a daily menu special. The purchase of the fish by the restaurant is
A) an intermediate good. B) part of net exports if the fish was caught beyond the U.S. border. C) an investment. D) an example of government expenditures on goods and services. E) a consumption expenditure.
The cost of making an economic exchange is called a(n) ________ cost
A) sunk B) transaction C) social D) accounting
Long-run economic growth policies focus on:
A. Shifting the aggregate demand curve to the left. B. Moving the economy along the production possibilities curve. C. Shifting the production possibilities curve outward. D. Moving the economy onto the production possibilities curve.
Table 34-4 ? Quantity Quantity Quantity Quantity ? Price per Demanded Supplied Demanded Supplied TV in United States in United States Japan Japan (dollars) (thousands) (thousands) (thousands) (thousands) 100 100 10 100 25 200 85 20 85 50 300 70 30 70 70 400 60 40 60 80 500 50 50 50 90 600 40 60 40 100 700 30 70 30 110 800 20 80 20 120 Table 34-4 presents the demand and supply schedules for television sets in Japan and the United States. If there is no trade between these countries, what are the equilibrium price and quantity in Japan?
A. P = $100, Q = 100 B. P = $200, Q = 85 C. P = $300, Q = 70 D. P = $400, Q = 60