To simplify the analysis of demand shocks in an open, two-economy, short-run model, we assume all of the following EXCEPT:
a. fixed prices and wages.
b. levels of government spending and taxes; foreign GDP and foreign rates of interest are given.
c. no net unilateral transfers or foreign factor income.
d. foreign GDP and foreign rates of interest are constant.
Ans: d. foreign GDP and foreign rates of interest are constant.
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The figure above shows Ilene's budget line. The price of a can of cat food is $2. Ilene's income per week is
A) $10. B) $40. C) $56. D) $160.
The "big tradeoff" refers to the point that governmental redistribution of income causes
A) less efficiency because it weakens incentives to work. B) less efficiency because it strengthens incentives to work. C) more efficiency because it weakens incentives to work. D) more efficiency because it strengthens incentives to work.
Which of the following is NOT a reason financial regulation and supervision is difficult in real life?
A) Financial institutions have strong incentives to avoid existing regulations. B) Unintended consequences may happen if details in the regulations are not precise. C) Regulated firms lobby politicians to lean on regulators to ease the rules. D) Financial institutions are not required to follow the rules.
The gender wage gap in Japan is smaller than in the U.S.; in Scandinavia it is wider
Indicate whether the statement is true or false