If Britain allows the pound-DM (Deutsche Mark) exchange rate to float, and there is an increase in the foreign interest rate, it:
A) has no effect on home rates.
B) will cause a monetary contraction and a higher interest rate in Britain.
C) will eventually decrease if trade is affected.
D) always shifts out the home IS curve (Britain), all else equal.
Ans: D) always shifts out the home IS curve (Britain), all else equal.
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Suppose Joe purchases 10 lottery tickets per month when his monthly income is $200. Joe receives a raise at work, giving him an extra $40 per month in take-home pay, and Joe now purchases 15 lottery tickets per month. What is Joe's income elasticity of demand for lottery tickets?
a. 2.5 b. 1. c. 0.4. d. 0.25.
If the Federal Reserve's goal is to stabilize aggregate demand, then in response to an increase in money demand, the Federal Reserve will _____ the money supply
Fill in the blank(s) with correct word
The marginal tax rate is the change in the average tax rate as income increases.
Answer the following statement true (T) or false (F)
which shows the production possibilities frontier for mufflers and socks. The opportunity cost of moving from point b to d is _____
a. equal to 30 mufflers. b. equal to 50 mufflers. c. equal to 100 socks. d. equal to 150 socks. e. equal to 250 socks.