An increase in government spending may expedite recovery from a recession in the short run, but in the long run this policy may
A) reduce investment in new capital.
B) make domestic businesses less competitive in international markets as the dollar appreciates in value.
C) raise interest rates and reduce consumer expenditures on automobiles and new houses.
D) All of the above are correct.
Answer: D
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The main difference between a sterilized intervention and unsterilized intervention in the foreign exchange market is:
A) a sterilized intervention is coordinated with other nations B) an unsterilized intervention does not change the exchange rate C) an unsterilized intervention does not change the monetary base D) a sterilized intervention does not change the monetary base
Does economic growth eliminate scarcity?
Refer to Figure 33-2. If the economy starts at A, a decrease in the money supply moves the economy
a. to A in the long run
b. to C in the long run
c. back to A in the long run
d. to D in the long run
The magnitude of intangible losses can sometimes be estimated by investigating the average
A. compensation awarded by juries in civil cases of wrongful death and personal injury. B. annual incomes of police detectives and private investigators. C. dollar amounts paid by insurance companies as reimbursement for property losses. D. annual costs borne by victims of white-collar crimes, such as embezzlement.