When the general price level in our economy increases, the following effects occur except:
A. The purchasing power of people's savings will increase
B. The interest rate will also tend to increase
C. Foreign buyers will buy less of our output, and we tend to import more
D. Our net exports will tend to decrease
A. The purchasing power of people's savings will increase
You might also like to view...
Based on the data in Table 3.1, if Jesse and April choose to specialize and trade, then
A) April will specialize in painting snowboards and trade snowboards for kites. B) Jesse will specialize in painting snowboards and trade snowboards for kites. C) April will specialize in painting kites and trade kites for snowboards. D) None of the above; specialization and trade are not beneficial for Jesse and April.
A cloth manufacturing firm is deciding whether or not to invest in new machinery. The machinery costs $45,000 and is expected to increase cash flows in the first year by $25,000 and in the second year by $30,000 . The firm's current fixed costs are $9,000 and current marginal costs are $15 . The firm currently charges $18 per unit. If the interest rate is 5% then the present value of the cash flows is
a. $6,020.41 b. $51,020.41 c. -$7,380.95 d. $10,000
Why did the Bretton Woods system ultimately break down?
a. The refusal of OPEC countries to accept payment for oil in gold. b. The refusal of surplus countries to devalue as required by law. c. An inability to devalue the U.S. dollar despite chronic payments deficits. d. An inability to adequately measure balance of payments surpluses and deficits.
When prices are falling, economists say that there is
a. disinflation. b. deflation. c. a contraction. d. an inverted inflation.