In the open-economy macroeconomic model which of the following falls if there is an increase in the budget deficit?
a. the interest rate
b. net exports
c. the exchange rate
d. All of the above are correct.
b
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Efficiency is an important social goal because:
A. movements toward economic efficiency make the total economic pie larger. B. it assures a normative outcome. C. it assures a fair outcome. D. it takes into consideration the distribution of income.
Assuming initially that the required reserve ratio = 10%, the currency-deposit ratio = 75%, and the excess reserve ratio = 156%, an increase in the currency-deposit ratio to 150% causes the M1 money multiplier to ________, everything else held
constant. A) increase from 0.73 to 0.78 B) decrease from 0.73 to 0.61 C) increase from 1.54 to 1.67 D) decrease from 1.67 to 1.54
In a proportional tax system each individual would pay the same dollar amount in taxes
a. True b. False Indicate whether the statement is true or false
To avoid the imposition of capital controls, a government wishing to keep its exchange rate at a certain level, may rely on:
a. forbidding all sales or purchases of foreign currency. b. asking the large banks to keep the prices at a certain level. c. asking for loans from the International Monetary Fund (IMF). d. intervention in the foreign exchange market to raise or lower the exchange rate.