Under a fixed exchange rate system, an expansionary fiscal policy is
A) more effective in an open economy than in a closed economy.
B) less effective in an open economy than in a closed economy.
C) equally effective in an open economy and in a closed economy.
D) marginally effective in an open economy and completely ineffective in a closed economy.
A
You might also like to view...
A Japanese businessman opened an automobile showroom in Singapore this year. His income will lead to a(n) ________
A) increase in the GDP of Singapore B) decrease in the GDP of Singapore C) increase in the GDP of Japan D) decrease in the GDP of Japan
Which of the following statements is true?
A) Defending an overvalued currency is easier than defending an undervalued currency. B) Defending an undervalued currency is easier in the short run than in the long run. C) The nominal exchange rate is the ratio of the same basket of goods in two countries. D) The real exchange rate is calculated by dividing the nominal exchange rate by the inflation rate.
A firm should make an investment if the expected return is greater than
A) the marginal cost of the investment. B) the fixed cost of the investment. C) the opportunity cost of the investment. D) the expected rate of inflation.
Axis Group has a publishing house, operates in the sports gear market, and owns a coffee plantation. A board of directors is responsible for the overall performance of the group. Fabrics Inc, on the other hand specializes in women's apparel. Which of the following statements will be true?
a. Decision-making at Axis will be more decentralized in comparison to Fabrics, Inc. b. Many decisions at Fabrics is likely to be made at lower levels. c. Individuals at higher levels at Fabrics are less likely to have all of the knowledge that exists at lower levels. d. Information transfer within Axis Group will be easier as compared to Fabrics, Inc.