Inferior goods are those for which demand increases as
A) the price of a substitute falls.
B) the price of a substitute rises.
C) income decreases.
D) income increases.
C
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If the Federal Reserve buys $3 billion worth of Japanese yen, $6 billion of euros, and sells $5 billion of British pounds, how does this affect the balance of payments?
A) Falls by $4 billion B) Rises by $4 billion C) Rises by $9 billion D) Falls by $5 billion
An unexpected drop in the growth rate of the CPI should send bond prices __________ and stock prices __________
A) up; up B) up; down C) down; up D) down; down
The J curve shows that
A. devaluation is likely to be unsustainable. B. devaluation is more likely to improve the trade balance in the short run than in the long run. C. devaluation is more likely to improve the trade balance after a longer span of time has elapsed. D. devaluation is unlikely to improve the trade balance in either the short run or the long run.
Refer to the information provided in Figure 6.2 below to answer the question(s) that follow.
Figure 6.2Refer to Figure 6.2. Assume Mr. Lingle is on budget constraint AC. If the price of a beer is $5, Mr. Lingle's monthly income is
A. $40. B. $80. C. $100. D. $200.