According to the crude quantity theory of money, if M rises by 10%, V will
A. fall by 10%.
B. fall by less than 10%.
C. stay the same.
D. rise by less than 10%.
C. stay the same.
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The basic assumption behind the J-curve effect is that
A) supply and demand for currencies are less elastic in the short run than in the long run. B) in the short run, supply will exceed demand; in the long run, they will be equal. C) an overshooting effect occurs as people adjust to the new information. D) investors tend to be overly cautious in currency instruments.
In Figure 13.1, "the zero lower bound" is displayed at ________
A) point 1 B) point 2 C) D) the origin (intersection of the axes) E) none of the above
As a share of total national income, government spending generally has
A) been constant over the last fifty years. B) increased over the last fifty years. C) decreased over the last fifty years. D) increased until ten years ago, and then decreased steadily.
A budget deficit is defined as:
A. a shortfall of expenditures compared to revenue. B. accumulated deficits minus accumulated surpluses. C. a shortfall of revenues compared to expenditures. D. accumulated surpluses minus accumulated deficits.