Suppose that Canada decides to peg its dollar ($C, or the loonie) to the U.S. dollar at an exchange rate of $C1 = $US1. What will happen to Canadian interest rates as a result of the leftward shift of the U.S. IS curve?
A) They will rise.
B) They will fall.
C) They will not change.
D) The IS curve will show an increase.
Answer: B) They will fall.
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The Big Mac index compares:
A. the cost of a Big Mac all over the world. B. the cost of a typical basket for consumers all over the world. C. typical food costs, as food is the largest component of all consumption baskets. D. typical food and energy costs across different locations.
The takeover process does not use up capital; it merely redistributes it
a. True b. False Indicate whether the statement is true or false
The short-run Phillips curve shows ________ between the unemployment rate and the inflation rate, and the long-run Phillips curve shows ________ between the unemployment rate and the inflation rate
A) a positive relationship; a negative relationship B) a negative relationship; a positive relationship C) no relationship; a negative relationship D) a negative relationship; no relationship E) no relationship; no relationship
Hurricane Katrina destroyed oil and natural gas refining capacity in the Gulf of Mexico. This subsequently drove up natural gas, gasoline, and heating oil prices. As a result, this should
A) move the economy down along a stationary short-run aggregate supply curve. B) shift the short-run aggregate supply curve to the right. C) move the economy up along a stationary short-run aggregate supply curve. D) shift the short-run aggregate supply curve to the left.