In the language of macroeconomics, investment refers to
a. saving.
b. the purchase of new capital.
c. the purchase of stocks, bonds, or mutual funds.
d. All of the above are correct.
b
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If the income elasticity of money demand is 3/4 and income increases 8%, by about how much does the price level change?
A) Falls by 6% B) Unchanged C) Rises by 6% D) Rises by 8%
What does it mean if the purchasing power in 1950 was 4.15 relative to the 1982 base year?
a. It took $4.15 in 1950 to buy what $1 bought in 1982. b. The average price level in 1982 was five times as high as in 1950. c. $4.15 in 1950 had the same nominal money value as $1 in 1982. d. It took $4.15 in 1982 to buy what $1 bought in 1950. e. Nominal prices have increased by more than 400 percent between 1950 and 1982, but the real value of money has not changed.
Which of the following is consistent with the classical view of Say's law?
A) Saving increases by $2 billion and investment decreases by $2 billion. B) Saving increases by $2 billion and consumption rises by $2 billion. C) Saving increases by $2 billion, consumption decreases by $2 billion, and investment rises by something less than $2 billion. D) Saving decreases by $2 billion and consumption decreases by more than $2 billion. E) none of the above
An effective way for a country to keep its currency fixed at a desirable level is to:
A. use internationalization of the debt. B. demand changes in trade policy to its trade partners. C. demand changes in monetary and fiscal policies of its trade partners. D. use traditional monetary, fiscal, and trade policies.