Which of the following raises the economic freedom of a country?
a. Limited international movement of productive resources
b. Higher taxes
c. Red-tapism and bureaucracy
d. Reduction of trade barriers like tariffs and quotas
e. Reduction of government subsidies on gasoline
d
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The curve shown in the figure above is the
A) potential GDP curve. B) Phillips curve. C) aggregate supply curve. D) demand for money curve. E) aggregate demand curve.
If the Fed conducts an open market purchase of Treasury bonds, this will
A) encourage banks to make more loans and will increase the money supply. B) encourage banks to make more loans and will decrease the money supply. C) cause banks to reduce their loans and will increase the money supply. D) cause banks to reduce their loans and will decrease the money supply.
During the course of an economic contraction, it is likely that a country would experience
A) a currency depreciation as explained by the absorption approach. B) a currency appreciation as explained by the absorption approach. C) a currency depreciation as explained by the elasticities approach. D) a currency appreciation as explained by the elasticities approach.
Relative PPP indicates that
A) the exchange rate between any two currencies is equal to the ratio of their price indexes. B) the same good sells for the same price internationally. C) the percentage change in the exchange rate is equal to the inflation differential between the domestic and foreign country. D) relative prices determine exchange rates.