Under a fixed exchange rate system, if the inflation rate of the United States is less than the inflation rate of other nations, the:
A. dollar will not change.
B. dollar will appreciate.
C. United States will develop a trade deficit.
D. United States will develop a trade surplus.
Answer: D
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Refer to the above table. Suppose there are technological advances in the production of smartphones. The new equilibrium price will be
A) $275. B) $375. C) less than $275. D) between $275 and $375.
Which of the following statements best describes one of the schools of thought regarding the “new economy” controversy?
a. Increased military spending post-9/11 has contributed to the growth in U.S. productivity. b. Extraordinary advances in communications and information technology have contributed to the growth in U.S. productivity. c. The increase in immigration has contributed to the growth in U.S. productivity. d. The aging U.S. population has contributed to the growth in U.S. productivity.
The monetary base is the sum of:
A. currency in the hands of the public M1. B. currency in the hands of the public and M2. C. reserves and currency in the hands of the public. D. reserves and M2.
Activist macroeconomists believe that fiscal and monetary policy ______.
a. have little or no function in trying to influence the economy b. can stimulate or dampen the economy in the short-run c. are only effective tools when applied over the long-run d. are only effective when they are used in ways the public was not expecting