If one dollar exchanges for 100 Japanese yen, then
a. a yen is worth $1
b. $10 will exchange for one yen
c. a yen is worth $100
d. the United States gets 100 times the number of goods for its currency than does the yen
e. one yen is worth a penny
E
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When the U.S. government runs a budget deficit, its primary way of covering that deficit is
A) printing money. B) defaulting on its payments. C) selling stock. D) issuing bonds.
If a firm's use of labor obeys the law of diminishing returns, then:
a. it does not have enough time to hire or fire workers. b. doubling the number of workers causes the firm's output to also double. c. its marginal costs must be falling. d. hiring additional workers adds less and less additional output.
If the economy is experiencing inflation, then the most appropriate government policy would be to:
a. shift the aggregate demand curve by using a tax increase coupled with spending cuts. b. shift the aggregate demand curve by using a tax increase coupled with more spending. c. shift the aggregate demand curve by using a tax cut coupled with spending cuts. d. shift the aggregate demand curve by using a tax cut coupled with more spending. e. shift the aggregate supply curve by using a tax cut coupled with spending cuts.
The U.S. economy in the mid-2000s did not experience stagflation because
A. energy prices declined. B. the energy content of GDP declined. C. it became more volatile since 1980. D. All of these responses are correct.