Contractionary monetary policy should increase foreign financial investment in the United States
Indicate whether the statement is true or false
FALSE
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You make a loan to the government of $100. The government promises to pay you back some sum of money in two years. The interest rate will be 4 percent over that period, but inflation will be 4 percent. How much will you require that the government pay you in two years in the absence of any inflation? With inflation?
What will be an ideal response?
Demand is given by QD = 6000 - 50P. Domestic supply is QS = 25P. Foreign producers can supply any quantity at a price of $40
a. If foreign producers can sell in the domestic market, what is the equilibrium price? What is the equilibrium quantity? How much is sold by domestic and foreign producers, respectively? b. Under domestic government pressure, foreign producers voluntarily agree to restrict their goods. What will happen to the price and quantity? What will happen to the amount that domestic producers supply? What will happen to revenues of domestic and foreign producers?
One of the major points of the circular flow diagram is:
a. If GDP rises due to increased production, incomes earned from producing GDP must rise. b. Increasing gross private domestic investment is the best way for a nation to grow. c. Increasing government spending is the best way for a nation to grow. d. The top and bottom flows are proof that most economies should always be in equilibrium. e. None of the above.
With consumption expenditure on the vertical axis and disposable income on the horizontal axis, the consumption function intersects the 45 degree line at $8 trillion. This result indicates that
a) autonomous consumption spending is $8 trillion b) consumption spending is $8 trillion when disposable income is $8 trillion c) consumption spending is less than $8 trillion because taxes must be paid d) consumption spending is more than $8 trillion because taxes have been paid