Greg, a U.S. citizen, opens an ice cream store in Bermuda. His expenditures are U.S
a. foreign portfolio investment that increase U.S. net capital outflow.
b. foreign portfolio investment that decrease U.S. net capital outflow.
c. foreign direct investment that increase U.S. net capital outflow.
d. foreign direct investment that decrease U.S. net capital outflow.
c
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Which of the following describe the United States economy in 2008 and and the start of 2009?
A) Real GDP reached a peak. B) The economy was in a recession. C) The economy was in an expansion. D) Real GDP per person increased. E) None of the above answers is correct.
The expectations theory
A) has difficulty explaining why U.S. Treasury securities have lower yields than corporate bonds. B) has difficulty explaining why yields on bonds of different maturities move together. C) has difficulty explaining why yield curves usually slope upward. D) accounts well for the fact that yield curves usually slope upward.
Assume the economy is in recession and real GDP is below full employment. The marginal propensity to consume (MPC) is 0.50, and the government follows Keynesian economics by using expansionary fiscal policy to increase aggregate demand (total spending). If an increase of $1,000 billion aggregate demand can restore full employment, the government should:
a. increase spending by $250 billion. b. decrease spending by $500 billion. c. increase spending by $1,000 billion. d. increase spending by $500 billion.
Monetarists believe that an increase in the money supply will lead to
a. a decrease in investment b. an increase in the interest rate c. a decrease in the price level d. an increase in nominal GDP e. an increase in real GDP