When Fed policy is being used to offset a contractionary gap, which of interest rates, investment, net exports and aggregate demand moves in the opposite direction from the others?
a. Interest rates
b. Investment.
c. Net Exports.
d. Aggregate demand..
a
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In a model of consumption and leisure, a drop in the wage will cause workers to work less if tastes are quasilinear in leisure.
Answer the following statement true (T) or false (F)
An example of a question that might be explored in microeconomics is to determine
A) the number of workers employed by Intel. B) savings by the household sector. C) why the U.S. economy has grown more rapidly than the Japanese economy. D) the total employment within the U.S. economy.
Suppose a particular production process results in a large amount of pollution and the government decides to impose a tax to correct for this externality, such that the socially optimal output will be produced. The tax will have the effect of shifting the
A. marginal private benefit curve to the right. B. marginal social benefit curve to the right. C. marginal private cost curve to the left. D. marginal social cost curve to the left. E. marginal private cost curve to the right.
Assume that the expectation of a recession next year causes business investments and household consumption to fall, as well as the financing to support it. If the nation has low mobility international capital markets and a fixed exchange rate system, what happens to the GDP Price Index and current international transactions balance in the context of the Three-Sector-Model? a. The GDP Price Index
falls and current international transactions balance becomes more positive (or less negative). b. The GDP Price Index and current international transactions balance remain the same. c. The GDP Price Index falls and current international transactions balance remains the same. d. Real GDP falls and nominal value of the domestic currency rises. e. There is not enough information to determine what happens to these two macroeconomic variables.