If the consumption function is given by C = 100 + 0.75(Y-T), then an increase of 10 units in taxes will cause the IS schedule to shift to the right by
a. -30 units.
b. -10 units.
c. 30 units.
d. 40 units.
A
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Answer the following statement(s) true (T) or false (F)
1. A market price contains no more information about a good than a good social planner would be able to obtain. 2. According to F.A. Hayek, knowledge is lost as statistics are used to convey information. 3. Whether a good is distributed by a social planner or a market system, the area beneath the demand curve out to the quantity available accurately measures the value consumers receive. 4. When allocation decision are not made on the basis of price traditional methods of social gain understate the actual gain to society.
If an economy uses monetary policy as its stabilization tool, the real interest rate and thus ________-run economic welfare depend on that economy's ________ policy
A) short, monetary B) short, fiscal C) long, monetary D) long, fiscal
People from other countries who wanted to invest in U.S. mortgage-backed securities ______.
a. saw them as a stable investment b. viewed them as a high-risk with high-rewards c. were blocked by federal regulations d. were required to also directly own real estate in the United States.
How does speculation in currencies affect the value of a nation’s currency?
What will be an ideal response?