An expansionary U.S. fiscal policy will:
A. increase the value of the dollar in all cases.
B. increase the value of the dollar if U.S. interest rates rise enough.
C. increase the value of the dollar if U.S. income and the U.S. price level increase enough.
D. decrease the value of the dollar if U.S. interest rates fall enough.
Answer: B
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When the economy is in a recessionary gap, the labor market is experiencing a _____________. In a self-regulating economy, wage rates will then ___________ and the ______________ curve will shift __________________
A) shortage; rise; AD; rightward B) shortage; fall; SRAS; leftward C) surplus; rise; AD; rightward D) shortage; fall; SRAS; rightward E) surplus; fall; SRAS; rightward
Refer to the figure at right. Profits will equal zero
A. when the price equals $1
B. at prices between $1 and $2
C. when the price equals $2
D. when the price equals $4
If the marginal benefit of a good is less than its marginal cost, then the nation should:
A. Produce more of that good B. Maintain the current level of production of that good C. Reduce the marginal benefit of that good D. Reduce the production of that good
In the foreign exchange market, how does a fall in the U.S. interest rate affect the supply of dollars?
What will be an ideal response?