Contractionary policies help correct a balance of payments deficit by
a. lowering domestic incomes but raising demand for imports
b. raising domestic incomes but lowering demand for imports
c. raising both domestic incomes and demand for imports
d. lowering both domestic incomes and demand for imports
e. lowering interest rates and increasing aggregate spending
D
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A manufacturer of grenade launchers estimates that the probability of a fatal accident caused by the design of its product is 1/80,000 and the value of a life lost is $2 million
The manufacturer can change the design to eliminate that chance for $20 per grenade launcher and is prepared to incorporate all cost-justified precautions. Will the manufacturer change the design? What would the benevolent social planner think about the manufacturer's decision if the true value of a life is actually $1.5 million?
The bid-asked spread is likely to be greater on securities that are
A) issued in larger denominations. B) have low market risk. C) less liquid. D) traded in a deep market.
Suppose the number of buyers in a market increases and a technological advancement occurs also. What would we expect to happen in the market?
a. Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous. b. Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous. c. Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous. d. Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
If Argentina suffers from capital flight, Argentinean domestic investment and Argentinean net exports will both decline
a. True b. False Indicate whether the statement is true or false