What impact might a decrease in the U.S. federal budget deficit have on interest rates and exchange rates in the market for the U.S. dollar? (Assume the exchange rate is stated in terms of foreign currency per U.S. dollar.)
A) Interest rates and exchange rates decrease.
B) Interest rates and exchange rates increase.
C) Interest rates increase and exchange rates decrease.
D) Interest rates decrease and exchange rates increase.
A
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Which of the following is (are) true regarding monetary policy targeting?
a. Since 1982, the Fed has emphasized money aggregate targets. b. Milton Friedman said that the Fed should pay more attention to interest rates and should focus less on growth of money supply. c. In the short run, it is useless to target interest rates as a tool of policy. d. In 1979, the Fed deemphasized interest rates and targeted specific money aggregates.
Automatic stabilizers stabilize the level of real GDP because:
A. Congress quickly passes laws that change spending and tax revenue. B. federal expenditures and tax revenues change as the level of real GDP changes. C. the spending and tax multiplier are constant. D. wages are controlled by the minimum wage law.
A competitive market is characterized by the Question 25 options:
A. presence of at least one broker or auctioneer, so that price fixing is possible. B. existence of many buyers and sellers, so that no one can influence the price. C. existence of a physical location where buyers and sellers meet. D. presence of many different goods, so that there is never a shortage of goods to buy.
Explain what the Marshall-Lerner condition represents
What will be an ideal response?