Changes in the growth rate of potential output and deviations of actual output from potential output are two logical explanations for:
A. increasing wage inequality.
B. short-term economic fluctuations.
C. the decline in the natural rate of unemployment.
D. skill-biased technological change.
Answer: B
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The main role of financial intermediaries is to
A) provide funds to the federal government to cover the budget deficit. B) borrow funds from savers and lend them to borrowers. C) provide advice to consumers on how they should handle their finances. D) help ensure that there is enough money in circulation.
Suppose you are a U.S. exporter expecting to receive a payment of NZD1,000 (New Zealand dollars) in 12 months. The annual interest rate on NZD deposits is 5 percent, and the annual interest rate on dollar deposits is 9 percent. If the present exchange rate is $0.50 per NZD and interest rate parity holds, how many dollars do you expect to receive at the maturity date of the export contract?
a. $2,000 b. $1,923 c. $1,000 d. $580 e. $520
Which of the following products has the least elastic demand?
A. Coca Cola in 12 oz. cans B. all cola drinks C. all carbonated beverages D. all beverages
If the exchange rate measured in euros per dollar increases, then
A. neither currency appreciates or depreciates. B. the dollar depreciates relative to the euro. C. the euro depreciates relative to the dollar. D. the euro appreciates relative to the dollar.