Expansionary monetary policy in a flexible exchange rate regime will cause
A) a shift of the IP curve.
B) an appreciation of the domestic currency.
C) a reduction in E.
D) no change in E.
C
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Classify each of the following goods on the basis of the characteristics of excludability and rivalry in consumption giving appropriate reasons: a) A lighthouse b) A pair of shoes c) A paid Web site d) A congested non-toll road
What will be an ideal response?
Given a production possibilities curve for defense goods and non-defense goods, which of the following is not true?
a. A production point outside the curve may be attained if new resources are discovered. b. A production point outside the curve may be attained by acquiring a new technology. c. A production point outside the curve may be attained by shifting resources to defense goods. d. A production point outside the curve may be attained by acquiring both a new technology and greater resources. e. A production point outside the curve cannot be attained with the current level of resources and technology.
In order to maintain a balanced budget, Congress has decided to cut taxes and government spending both by $25 billion. What will happen to GDP?
a. It will increase. b. It will remain the same. c. It will decrease. d. It's impossible to know without the multiplier.
If a product has several good substitutes, demand for the product is most likely to be:
A. very inelastic. B. inelastic. C. unit elastic. D. elastic.