Two variables that affect the slope of the aggregate demand curve are
A. government purchases and real taxes.
B. tax rates and interest rates.
C. government purchases and interest rates.
D. exchange rates and income rates.
Answer: B
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The price paid by buyers in a market will increase if the government
a. decreases a binding price floor in that market. b. increases a binding price ceiling in that market. c. decreases a tax on the good sold in that market. d. imposes a binding price ceiling in that market.
Which of the following are accurate findings of recent studies about the effectiveness of intervention activities?
A. Smaller interventions are usually more successful than larger interventions. B. Intervention is often effective for two weeks or less in reversing the direction of the trend of the exchange rate or reducing the speed of the trend. C. The effectiveness of the intervention usually can be observed in the trend for months to come. D. Interventions are usually more effective when exercised by an individual monetary authority rather than by the authorities of two or more countries intervening jointly.
The exchange rate set for an immediate trade is often referred to as a
A. spot exchange rate. B. forward exchange rate. C. managed exchange rate. D. pegged exchange rate.
Identify three government policies that discourage saving