Which one of the following is an area of agreement among modern macroeconomists with regard to the use of fiscal policy?
a. Congressional action is necessary if automatic stabilizers are going to be an effective stabilization tool.
b. It is difficult to time changes in discretionary fiscal policy in a manner that will promote stability.
c. Fiscal policy is more potent than the early Keynesian view implied.
d. Budget deficits are a highly effective tool with which to combat a severe recession.
B
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Lower U.S. interest rates cause the value of the dollar to
A) fall, making U.S. goods relatively more expensive on world markets. B) fall, making U.S. goods relatively cheaper on world markets. C) rise, making U.S. goods relatively more expensive on world markets. D) rise, making U.S. goods relatively cheaper on world markets.
Which of the following statements is true about the income elasticity of demand?
A) The income elasticity of demand for normal goods is always zero. B) The income elasticity of demand for inferior goods is always zero. C) The income elasticity of demand for normal goods is always positive. D) The income elasticity of demand for inferior goods is always positive.
A voluntary export restraint is an agreement negotiated between two countries that places a numerical limit on the quantity of a good that can be imported by one country from the other country
Indicate whether the statement is true or false
If the U.S. dollar appreciates, it means that
a. the value of the U.S. dollar has decreased b. the value of foreign exchange has increased c. fewer U.S. dollars are required to purchase foreign exchange d. more U.S. dollars are required to purchase foreign exchange e. exports will fall immediately