Suppose the Federal Reserve releases a policy statement today which leads people to believe that the Fed will be enacting expansionary monetary policy in the near future
Everything else held constant, the release of this statement would immediately cause the demand for U.S. assets to ________ and the U.S. dollar to ________. A) increase; appreciate
B) decrease; appreciate
C) increase; depreciate
D) decrease; depreciate
D
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Suppose there are two policy options facing a vote in the Senate. In the first, government spending will increase $50 billion, while the second option is to cut taxes by $50 billion. A Keynesian economist would argue for
A) the spending option because it has a bigger impact on total spending. The spending directly raises total spending plus it works through the multiplier, while the tax cut only works through the multiplier. B) the tax option because it is easier to pass. The effects on total spending would be identical. C) the spending option because it won't affect the deficit the way the tax cut would. D) the tax option because it also affects the incentives workers face. Long-run aggregate supply will increase with the tax cut, but not with the spending increase.
When computer manufacturers overcame the enormous 13,000 Chinese character barrier by creating a workable keyboard through voice and handwriting recognition, PCs became more accessible to the Chinese. What was the predicted effect of the events on equilibrium price and quantity of PCs sold in China?
A. The price rose and quantity fell. B. The price and quantity fell. C. The price and quantity rose. D. The price fell and quantity rose.
Assume that both the demand curve and the supply curve for DVD players shift to the left but the demand curve shifts more than the supply curve. As a result
A) both the equilibrium price and quantity of DVD players will decrease. B) the equilibrium price of DVD players will decrease; the equilibrium quantity may increase or decrease. C) the equilibrium price of DVD players may increase or decrease; the equilibrium quantity will decrease. D) the equilibrium price of DVD players will increase; the equilibrium quantity may increase or decrease.
An example of a government policy to enhance technological progress is:
A. the provision of publicly-funded education. B. government support for basic research. C. the construction of an interstate highway system. D. maintaining a well-functioning legal system.