The net exports effect is the inverse relationship between net exports and the ____ of an economy
a. potential real GDP
b. chain-price deflator
c. price level
d. consumption spending
c
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Under a fixed exchange rate system, an expansionary fiscal policy is
A) more effective in an open economy than in a closed economy. B) less effective in an open economy than in a closed economy. C) equally effective in an open economy and in a closed economy. D) marginally effective in an open economy and completely ineffective in a closed economy.
Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. 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 the nominal value of the domestic currency in the context of the Three-Sector-Model?
a. The real risk-free interest rate rises, and nominal value of the domestic currency falls. b. The real risk-free interest rate rises, and nominal value of the domestic currency remains the same. c. There is not enough information to determine what happens to these two macroeconomic variables. d. The real risk-free interest rate rises, and nominal value of the domestic currency rises. e. The real risk-free interest rate falls, and nominal value of the domestic currency falls.
Means-tested welfare benefits provide recipients with a strong incentive to:
A. leave welfare. B. work. C. underreport their earnings. D. accurately disclose their earnings.
If Josylnn can make $70,000 as an accountant, $50,000 as a school teacher, $20,000 as a cook, and nothing as an opera singer, she has a comparative advantage in
A. opera singing. B. being a cook. C. being a school teacher. D. accounting.