Contractionary fiscal policy in the United States reduces domestic income, prices, and interest rates, so the exchange rate will decrease.
Answer the following statement true (T) or false (F)
False
Contractionary fiscal policy has an ambiguous effect on the exchange rate. The lower income and prices associated with such a policy increases the exchange rate, but the lower interest rates also produced lower the exchange rate. The net effect is unknown. The interest rate effect works in the opposite direction of the income and price effects.
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Refer to the scenario above. This implies that Lawland has a trade ________
A) deficit B) surplus C) tariff D) equilibrium
The price elasticity of demand is a measure of
A) the equilibrium price of a product. B) buyers' responsiveness to changes in the price of a product. C) the amount of a product purchased when income increases. D) whether a product is a substitute or a complement. E) how much a change in demand affects the equilibrium price.
List three ways government can reduce depletion of an endangered resource. Which of these ways requires the least amount of management, monitoring, and bureaucracy?
What will be an ideal response?
In Sewei's lawnmowing business, in order to produce each mowed lawn, Sewei must hire exactly one unit of capital (a lawnmower) and exactly one unit of labor. Describe the elasticity of substitution between labor and capital
What will be an ideal response?