The most likely impact of an unanticipated increase in the money supply is a(n):
a. increase in the real interest rate, which in turn stimulates investment and GDP
b. decrease in the real interest rate, which in turn stimulates investment and GDP.
c. decrease in real output, which causes the real interest rate to decline and in turn stimulate investment and GDP.
d. increase in real output, which causes the real interest rate to decline.
b
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Which of the following would increase the net export component of U.S. GDP?
A. A bottle of California wine is purchased in London. B. A bottle of French wine is purchased in New York. C. A car produced in Michigan is purchased in Louisiana. D. A car produced in Japan is purchased in California.
What is interest rate parity and what happens when this condition doesn't hold?
What will be an ideal response?
Mary Green takes a summer course in London, England. She doesn't buy British pounds at the U.S. airport, where the rate is 1 pound = $1.60 . Upon arrival in London, she finds that she can buy pounds for $1.65 each. Which of the following is true?
a. Green would have been better off if she had bought pounds in the United States where U.S. dollars were cheaper. b. Green would have been better off if she had bought pounds in the United States where pounds were less expensive. c. The pounds were more expensive in London because a currency is always most valued in its home country. d. The pounds were more expensive in the United States because they are less available there. e. It doesn't matter where she buys the pounds, since she can't use U.S. money anyway once she's in England.
Assume that an economy has 9000 workers, each working 2000 hours per year. The average real output per worker-hour is $20. What will the total output or real GDP be? Explain
Please provide the best answer for the statement.