If the U.S. government enters the foreign exchange market and sells dollars to maintain a specific exchange rate with the yen, the dollar will ________ and the yen will ________
A) depreciate; depreciate B) depreciate; appreciate
C) appreciate; depreciate D) appreciate; appreciate
B
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When the interest rate is considered higher than normal, the speculative demand for money ________, the transaction demand ________
A) increases; decreases B) decreases; increases C) remains the same; decreases D) first increases then decreases; remains the same
The long-run cumulative dynamic multiplier
A) cannot be calculated since in the long-run, we are all dead. B) is the sum of all individual dynamic multipliers. C) is the coefficient on Xt-r in the standard formulation of the distributed lag model. D) is the difference between the coefficient on Xt-1 and Xt-r.
Which of the following is true of the consumption function? a. A decrease in flat tax results in an upward shift of the consumption function
b. An increase in interest rates results in an upward rotation of the consumption function. c. An increase in the expected future income results in an upward rotation of the consumption function. d. A decrease in the marginal propensity to save results in a downward shift of the consumption function.
A monopoly
A. Is one of many sellers in a given market. B. Maximizes profits at the output level where P = MR. C. Maximizes profits at the output level where P = MC. D. Charges higher prices than competitive firms, ceteris paribus.