The amount of U.S. exports to the rest of the world is primarily determined by _____
a. the real disposable income in the United States
b. the real disposable income in other nations
c. the real interest rate in other nations
d. the real interest rate in the United States
e. the government budget deficits in other nations
b
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New Keynesian theory differs from new classical theory in that New Keynesian theory assumes that wages and prices are not completely flexible in the short-run, while fully flexible wages and prices are an assumption of new classical theory
Indicate whether the statement is true or false
Figure 5-9
In Figure 5-9, the consumer's marginal rate of substitution at his optimum choice of X and Y is
a.
?1.
b.
16.
c.
8.
d.
?8.
The rate at which two currencies can be traded for each other is called the ________ exchange rate.
A. real B. fixed C. nominal D. flexible
If government chooses a policy that does not lead to a Pareto improvement, one may say that
A) this policy creates only winners. B) this policy creates winners and losers. C) only poor people benefit from this policy. D) this policy only creates losers.