Which of the following is most likely to happen if the demand for money decreases in the domestic economy under floating exchange rates and free capital mobility?
A. The average price level in the domestic economy will decrease.
B. The domestic interest rate will increase.
C. Domestic borrowing will decline.
D. The financial account of the country's balance of payments will deteriorate.
Answer: D
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In the long run, following a combination of a negative demand shock and a temporary negative supply shock, ________
A) both inflation and output return to the original long-run equilibrium values B) inflation is permanently increased, while output returns to potential output C) output returns to potential output, while inflation may be higher or lower than its initial value D) inflation is permanently reduced, while output returns to potential output E) none of the above
Which of the below outcomes is the result of a Nash equilibrium in pure strategies for the game in Scenario 13.10?
A) -5, 5 B) 10, -10 C) 8, -8 D) 0, 0 E) There is no pure strategy equilibrium in this game.
Control of water pollution from pesticide runoff in the United States is the responsibility of
a. the U.S. Department of Agriculture b. the Environmental Protection Agency c. state attorneys general d. state departments of agriculture e. state environmental protection agencies
Most transactions in the foreign exchange market are for ______________.
a. portfolio investments b. tourists c. businesses d. foreign direct investments