In a two-period model with production, an increase in the world real interest rate
A) increases domestic output and increases the current account surplus.
B) increases domestic output and decreases the current account surplus.
C) decreases domestic output and increases the current account surplus.
D) decreases domestic output and decreases the current account surplus.
A
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Suppose the government has a budget surplus. Then
A) private saving is less than investment and government saving is positive. B) private saving is greater than investment and government saving is positive. C) private saving is greater than investment and government saving is negative. D) private saving is equal to investment. E) private investment is greater than the sum of government saving and private saving.
The Fed's open market operations normally involve only the purchase of government securities, particularly those that are short-term. However, during the crisis, the Fed started new programs to purchase
A) mortgage-backed securities and long-term Treasuries. B) mortgage-backed securities and Treasury bills. C) commercial papers and short-term Treasuries. D) Treasury bills and Treasury notes.
Exchange rate transactions that involve the immediate transfer of bank deposits are known as ________
A) backward transactions B) forward transactions C) spot transactions D) dog transactions
Kathy eats five slices of pizza on a Saturday night but admits each slice of pizza doesn't taste as good as the previous one. This suggests that for Kathy the
A. marginal utility of a slice of pizza is negative. B. total utility of slices of pizza is increasing by larger and larger increments. C. total utility of slices of pizza is declining. D. marginal utility of a slice of pizza is positive but decreasing.