If the U.S. interest rate rises while interest rates in the rest of the world do not change, the higher U.S. interest rate
A) decreases the demand for dollars.
B) increases the demand for dollars.
C) has no effect on the demand for dollars.
D) will stop all trading between the currencies of the U.S. and other countries.
B
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If the marginal propensity to consume is 0.85 and there are no imports or income taxes, the expenditure multiplier is equal to
A) 1 ÷ (1 - 0.85 ) = 1 ÷ 0.15 = 1.45. B) 0.85 × the change in autonomous expenditure. C) 0.85 ÷ 1 = 0.85. D) 1 ÷ 0.85 = 1.176. E) 1 - 0.85 = 0.15.
The price of one country's currency in terms of another's is called
a. the interest rate. b. the inflationary premium. c. the discount rate. d. the exchange rate.
The Federal Reserve stepped in to help
A. Bear Stearns but not Lehman Brothers. B. Lehman Brothers but not Bear Stearns. C. both Bear Stearns and Lehman Brothers. D. neither Bear Stearns nor Lehman Brothers.
A sale of government securities to the public by the Federal Reserve will increase the money supply.
Answer the following statement true (T) or false (F)