An increase in government transfer payments will shift the aggregate demand curve to the right
A) by the initial change in consumption arising from the change in transfer payment × the spending multiplier.
B) by the initial change in income arising from the change in transfer payment × the spending multiplier.
C) by the change in transfer payments × times the spending multiplier.
D) by the change in transfer payments × times the marginal propensity to consume
Answer: A) by the initial change in consumption arising from the change in transfer payment × the spending multiplier.
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Suppose purchasing power parity exists in the car stereo market in the United States and Australia. If a car stereo costs $230 in the United States and the exchange rate is $1 = $AUD1.67, the same car stereo may be purchased in Australia for approximately:
a. $AUD 138. b. $AUD 230. c. $AUD 2,300. d. $AUD 384. e. $AUD 108.
In 1954, Mickey Mantle earned $21,000 playing for the New York Yankees. The CPI in 1954 was 26.9, and the CPI in 2010 was 218.06 . What is Mickey Mantle's 1954 salary in 2010 dollars?
Based on the graph showing the market for loanable funds, what will happen at a real interest rate that is higher than equilibrium?
a. Lenders will compete for borrowers and interest rates will fall.
b. Lenders will compete for borrowers and interest rates will rise.
c. Borrowers will compete for loans and interest rates will fall.
d. Borrowers will compete for loans and interest rates will rise.
If the Mexican peso appreciates against the U.S. dollar
A. U.S. exports will become more expensive in Mexico. B. Mexican exports will become cheaper in the United States. C. Mexican exports will become more expensive in the United States. D. there will be no change in the price of Mexican imports in the United States.