A federal deficit that raises interest rates will, everything else being equal,
a. lead to a dollar depreciation.
b. decrease imports.
c. reduce exports.
d. reduce the balance of trade deficit.
c
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The implementation lag is
A) the time it takes for policy makers to obtain data indicating what is happening in the economy. B) the time it takes for policy makers to be sure of what the data are signaling about the future course of the economy. C) the time it takes to pass legislation to implement a particular policy. D) the time it takes for policy makers to change policy instruments once they have decided on the new policy. E) the time it takes for the policy actually to have an impact on the economy.
From society's point of view, the amount of air and water pollution that currently exists is excessive. Which of the following statements are explanations of this excessive pollution?
a. Firms that cause air and water pollution are not paying the full social costs of producing their output. b. Consumers, who purchase goods from firms that pollute, are not paying a price for these goods which totally reflect the social costs of producing the goods. c. Private property rights for clear air and clean water are not currently well defined by the judicial system; hence private individuals cannot charge polluters for the external costs these polluters impose on private individuals. d. All of these.
Recently, Dow Chemical 8.5 percent bonds maturing in 2006 closed at $92 with a face value of 100 . This means the Dow bonds
a. sold for $92 each. b. increased in value $92 that day. c. sold at 92 percent of par value. d. had the year of maturity changed to 1992.
If the price of tickets to Disney World increases 10 percent, and as a result, attendance falls by 15 percent, the demand for the tickets is
a. elastic. b. inelastic. c. of unitary elasticity. d. indeterminate.