In an open economy with a given level of real interest rates and risk, a decrease in real interest rates abroad will ________ capital inflows and ________ the equilibrium domestic real interest rate.
A. increase; decrease
B. decrease; increase
C. decrease; decrease
D. increase; increase
Answer: A
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A) an important form of income redistribution. B) present when the average tax rate decreases as income decreases. C) present when the average tax rate decreases as income increases. D) Both answers A and B are correct.
An oligopoly with a dominant price leader will produce a level of output between that which would prevail under competition and that which a monopolist would choose in the same industry.
Answer the following statement true (T) or false (F)
Social insurance programs
A. Involve an income eligibility test. B. Are a type of welfare program. C. Are event-conditional. D. Are means-tested.
When a U.S. investor buys a bond issued in a foreign country,
A) the balance on the current account decreases. B) the balance on the capital account decreases. C) the balance of trade decreases. D) the balance on the financial account decreases.