In a fixed exchange rate regime, which of the following policies could lead to a greater trade deficit and leave aggregate demand constant?
A) Devalue the currency.
B) Increase government spending.
C) Decrease government spending.
D) Decrease government spending and devalue the currency.
E) Increase government spending and revalue the currency.
E
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Tariffs
A. may be imposed either to raise revenue or to shield domestic producers from foreign competition. B. are excise taxes on goods exported abroad. C. are per-unit subsidies designed to promote exports. D. are also called import quotas.
Suppose a price index is formed to measure changes in the price level between 1989 to 1995. If the price index focuses on the year-to-year costs of the typical market basket purchased in 1989, then the reported price changes
a. seem worse for consumers than they really are. b. seem better for consumers than they really are. c. accurately reflect changes in people's levels of satisfaction. d. may overestimate or underestimate the effects of price changes, depending on whether consumers' indifference curves are relatively flat or steep.
The money supply curve is ________.
A. inelastic with respect to the interest rate B. drawn as a downward sloping line C. elastic with respect to the interest rate D. drawn as an upward sloping line
In 2009, _________ became the world's largest exporter.
A. Germany. B. China. C. Japan. D. Russia.