In the open-economy macroeconomic model, the supply curve of currency is vertical because the quantity of currency supplied does not depend on the real exchange rate
a. True
b. False
Indicate whether the statement is true or false
True
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Government stabilization policy
A. cannot influence investment spending. B. can stimulate aggregate demand and thereby induce businesses to invest, but the amount is not totally predictable. C. can stimulate aggregate demand, but investment spending will not be affected. D. can stimulate aggregate demand, but only in the long run.
The gains from trade within a price system is
A) the sum of consumer surplus and producer surplus. B) consumer surplus less producer surplus. C) consumer surplus divided by producer surplus. D) consumer surplus multiplied by producer surplus.
If the efficient market hypothesis is correct, then
a. index funds should typically beat managed funds, and usually do. b. index fund should typically beat managed funds, but usually do not. c. mutual funds should typically beat index funds, and usually do. d. mutual funds should typically beat index funds, but usually do not.
The quantity of investment demanded by firms
A. is unrelated to the interest rate. B. is directly related to the interest rate. C. is positively related to the level of uncertainty. D. is inversely related to the interest rate.