In most businesses, there is only one way to produce output.
Answer the following statement true (T) or false (F)
False
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When the Fed increases the money supply,
A) the interest rate rises and this stimulates consumption spending. B) the interest rate falls and this stimulates investment spending. C) the interest rate rises and this stimulates investment spending. D) people spend less because they have more money.
Ilona’s country has five factories. In contrast, Hassan’s country has 100 factories. How will productivity in each country be impacted if each country builds two new factories?
a. Both Ilona’s and Hassan’s countries will experience a major increase in productivity. b. Hassan’s country will experience a relatively large increase in productivity, while Ilona’s country will experience a relatively small increase in productivity. c. Ilona’s country will experience a relatively large increase in productivity, while Hassan’s country will experience a relatively small increase in productivity. d. Neither Ilona’s nor Hassan’s country will experience an increase in productivity.
Imperfect multicollinearity
A) implies that it will be difficult to estimate precisely one or more of the partial effects using the data at hand B) violates one of the four Least Squares assumptions in the multiple regression model C) means that you cannot estimate the effect of at least one of the Xs on Y D) suggests that a standard spreadsheet program does not have enough power to estimate the multiple regression model
Discuss the determinants of a nation's exchange rate value for its currency in foreign exchange markets. What happens to a nation's balance of trade if the nation's currency appreciates? Why?