The ________ of the 1968 tax surcharge led to the prominence of the developer of the permanent-income hypothesis that predicted it, ________
A) success, Walter Heller
B) success, Milton Friedman
C) failure, Walter Heller
D) failure, Milton Friedman
D
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If the U.S. government enters the foreign exchange market and purchases dollars to maintain a specific exchange rate with the yen, the dollar will ________ and the yen will ________
A) depreciate; depreciate B) depreciate; appreciate C) appreciate; depreciate D) appreciate; appreciate
For a monopoly, the demand for its product is perfectly elastic at the market price
Indicate whether the statement is true or false
What is the exchange rate between the dollar and the British pound if a pair of American jeans costs 50 dollars in New York and 100 Pounds in London?
A) 1.5 dollars per British pound B) 0.5 dollars per British pound C) 2.5 dollars per British pound D) 3.5 dollars per British pound E) 2 dollars per British pound
Answer the following statements true (T) or false (F)
1) Investment is not affected by current profits; it is affected by expected future profits only. 2) The multiplier measures the change in real GDP that results from a given change in the price level. 3) The multiplier effect magnifies the effect of a decrease in spending, resulting in a bigger decrease in real GDP. 4) The multiplier value is the reciprocal of the marginal propensity to consume.