Subsidizing education can lead an efficient level of production because education has external benefits
Indicate whether the statement is true or false
TRUE
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Which of the following transactions is a debit in the US current account?
A) Export of merchandise B) Export of services C) Gifts to foreigners D) Foreign bond purchases
Which of the following is a valid statement?
a. Excess reserves = total reserves minus required reserves. b. Required reserves = the minimum reserves required by the Fed. c. Required reserve ratio = required reserves as a percentage to total deposits. d. All of these.
According to non-Keynesians, how will an increase in government spending financed by borrowing during a recession affect recovery?
a. Higher future taxes and interest rates will be required to finance the larger debt and this will weaken the recovery. b. Repayment of the debt can always be shifted to the future, making it possible to keep tax rates low and thereby strengthen the recovery. c. Higher interest payments will increase future government spending, and thereby promote a stronger the recovery. d. The increase in government spending will exert a multiplier effect on the economy, leading to a stronger recovery.
By how much does the real, bilateral exchange rate change when the nominal, bilateral exchange rate changes from $1.40/£ to $1.60/£, the U.S. tradable basket from $2,100 to $2,200 and the British tradable basket from £1,500 to £1,600?
a. The real exchange rate rises by 16.35%. b. The real exchange rate falls by 3.1% c. The real exchange rate rises by 3.1% d. The real exchange rate falls by 10.8% e. The real exchange rate falls by 12.5%