Easy monetary policy reduces the real interest rate, which ________ the demand for dollars, ________ the supply of dollars, and ________ the equilibrium value of the dollar.
A. increases; increases; increases
B. increases; decreases; increases
C. decreases; increases; decreases
D. decreases; decreases; decreases
Answer: C
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Compare and contrast a price ceiling and a price floor
What will be an ideal response?
Assume that the equilibrium price for a good is $5 . If the market price is $10, a:
a. shortage causes the price to decline toward $5. b. surplus causes the price to rise above $10. c. shortage causes the price to rise above $10. d. surplus causes the price to decline toward $5.
Suppose the government of an importing country is considering imposing a tariff that would result in imports falling to 1 million units per year, or an import quota of 1 million units per year. Which of the following best describes the difference in the impact of these alternative trade restrictions?
a. The domestic price of the imported good will rise higher with the tariff than with the quota. b. Importing-country consumers are made worse off with the quota than with the tariff. c. Domestic producers that compete with the imports are made better off by the tariff than with the quota. d. The tariff provides the government of the importing country with revenue, while the quota provides gains to foreign exporting firms with quota rights.
Which of the following would not be included in personal consumption expenditure?
A. Medical expenses B. College tuition C. A movie ticket D. Federal police protection