Under the fixed rate regime foreign countries could hold their dollar exchange rates constant by
A) using tight monetary policy.
B) using expansionary fiscal policy.
C) negotiating with the central bank of the United States.
D) setting their domestic interest rate equal to the U.S. interest rate.
E) holding their exchange rates constantly pegged to the euro and yen.
D
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Pork-barrel legislation typically bundles the pet projects of several special interest groups. Such legislation
a. is frequently enacted, even though the overall benefits to society are less than the overall costs to society. b. seldom benefits special interest groups. c. usually, if successful, helps the majority of taxpayers. d. seldom passes because social benefits are far smaller than social costs.
Figure 8-1
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Based on the scatter diagram in Figure 8-1, if real disposable income is $800 billion, the consumption spending would be approximately
A. $800 billion. B. $650 billion. C. $540 billion. D. $420 billion.
Desired consumption is Cd = 2000 + 0.9Y - 100,000r - G, and desired investment is Id = 1000 - 45,000r. Real money demand is Md/P = Y - 6000i. Other variables are ?e = 0.03, G = 500, 
= 1000, and M = 2100.(a)Find the equilibrium values of the real interest rate, consumption, investment, and the price level.(b)Suppose government purchases decline to 400. What happens to the variables listed in part (a)? (c)Suppose government purchases rise to 600. What happens to the variables listed in part (a)? (d)What feature in this example leads to the result that you don't need to know the amount of taxes collected by the government to find the equilibrium?
What will be an ideal response?
Keynes was motivated to create a macroeconomic theory different from classical theory because
A) he believed in government intervention in the economy. B) he believed in the idea of the invisible hand. C) monetary policy was more important than the classicals acknowledged. D) classical theory was inconsistent with the data in the Great Depression.