Suppose that Canada decides to peg its dollar ($C, or the loonie) to the U.S. dollar at an exchange rate of $C1 = $US1. What is likely to happen to U.S. GDP following the leftward shift of its IS curve?
A) It will rise.
B) It will fall.
C) It will not change.
D) It will rise dramatically.
Answer: B) It will fall.
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If the x-axis variable increases while the y-axis variable decreases, the variables x and y are negatively related
Indicate whether the statement is true or false
If the price of chewing gum is represented by P in equation P = 25 - 0.5 QD, then the corresponding quantity of chewing gum demanded is represented by the demand equation
A) QD = 2P - 0.5. B) QD = 0.5P + 25. C) QD = -5 + 10P. D) QD = 50 -2P.
Which of the following means that the country is a net borrower from abroad?
a. current account surplus b. current account deficit c. trade surplus d. trade deficit
A small increase in productivity growth can have a huge impact on a country’s standard of living.
Answer the following statement true (T) or false (F)