An increase in the real interest rate on U.S. bonds, everything else equal, will have the following impact on the foreign exchange market:
A. the supply of dollars will increase.
B. the demand for dollars will decrease.
C. the dollar will depreciate relative to foreign currencies.
D. the demand for dollars will increase.
Answer: D
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A) cut taxes B) raise taxes C) cut government expenditure on goods and services D) raise interest rates E) decrease the quantity of money
In a market system, resources are allocated by
a. the orders of authority b. traditional practices c. prices d. absolute advantage e. production possibilities frontiers
The crowding-in effect depends on the sensitivity of investment to
a. GDP, as does the crowding-out effect. b. interest rates, whereas the crowding-out effect depends on the sensitivity of investment to GDP. c. interest rates, as does the crowding-out effect. d. GDP, whereas the crowding-out effect depends on the sensitivity of investment to interest rates.
Under which of the following scenarios would a park be considered a club good?
a. Visitors to the park must pay an admittance fee, but there are always plenty of empty picnic tables. b. Visitors to the park must pay an admittance fee and frequently all of the picnic tables are in use. c. Visitors can enter the park free of charge and there are always plenty of empty picnic tables. d. Visitors can enter the park free of charge, but frequently all of the picnic tables are in use.