If the U.S. demand for British pounds increases,
a. the dollar price of a British pound will increase
b. the dollar price of a British pound will decrease
c. the exchange rate between dollars and pounds will be out of equilibrium
d. the pound will fall in value against the dollar
e. there will be no change in either the value of the dollar or the pound
A
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If government expenditures are increased by $50 billion, assuming all other factors stay constant, we would expect the initial impact of the increased spending to cause real GDP to
A. increase by $50 billion. B. stay constant. C. increase by less than $50 billion. D. increase by more than $50 billion.
Which of the following statements is normative?
A. A large budget surplus is likely to lower interest rates. B. High taxes tend to decrease saving. C. When the Federal Reserve increases the money supply, interest rates decrease. D. Large budget deficits should be avoided.
Fiscal stimulus involves raising taxes and reducing spending to stimulate the economy.
Answer the following statement true (T) or false (F)
Initially trade between the United States and Canada is balanced. Then, if a change in the exchange rate reduces the U.S. dollar price of Canadian goods, ceteris paribus, we would expect
A. a trade deficit in Canada. B. a trade surplus in the United States. C. a trade surplus in Canada. D. a trade deficit in both countries.