If the Chinese government were to begin selling large quantities of its dollar-denominated assets, how might that affect China's economy and the U.S. economy?
What will be an ideal response?
If the dollar-denominated assets are exchanged for yuan, the $/yuan exchange rate will rise and the money supply in China will decline. Both nominal appreciation and the increase in the interest rate will slow economic growth in China and lower inflation. If the dollar-denominated assets are replaced by other foreign assets (e.g., euro- or yen-denominated), then only the dollar depreciation will occur. Depreciation of the dollar will boost U.S. exports and increase inflation in the U.S.
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What is the relationship between the marginal product of labor and the marginal cost?
What will be an ideal response?
Some goods, such as lighthouses, can switch between being public goods and being private goods depending on the circumstances
a. True b. False Indicate whether the statement is true or false
Mallory Trammell is a homemaker. Last week, she was busy with her normal household chores. She is:
A. not a member of the labor force. B. a member of the civilian labor force who is unemployed. C. a member of the civilian labor force who is underemployed. D. a member of the civilian labor force who is employed.
One reason stagflation is difficult to recover from is because:
A. less output requires less inputs to be hired. B. prices tend to adjust more quickly downward than upward. C. wages are sticky downward. D. input prices increase with output prices.