The pure interest yield
a. reflects the expectation that the loan will be repaid with dollars of less purchasing power.
b. is the real price one must pay for earlier availability.
c. reflects the probability of default.
d. is the real rate of return one could expect if the funds were invested in the commodities market.
B
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The abbreviation "GDP" stands for
A) Gross Domestic Prices. B) General Domestic Prices. C) Gross Domestic Product. D) Great Domestic Prices. E) Government's Domestic Politics.
According to liquidity preference theory, as real income increases, so does ________
A) the supply of real money balances B) the demand for real money balances C) the real interest rate D) all of the above E) none of the above
If an improvement in the quality of education in the United States increases the productivity of labor, this will
a. increase aggregate demand and decrease aggregate supply. b. increase short-run aggregate supply and reduce aggregate demand. c. decrease aggregate demand and increase short-run aggregate supply. d. increase both long-run and short-run aggregate supply.
If Country A's overall balance is equal to -$100 billion (minus $100 billion), then:
a. There is an excess demand for Country A's currency in the foreign exchange market that is being met by the central bank selling enough domestic currency to make up the difference. b. There is an excess supply of Country A's currency in the foreign exchange market that is being met by the central bank buying enough domestic currency to make up the difference. c. Country A's Overall balance cannot -$100 billion. It must equal 0. d. Country A's Current account must equal +$100 billion. e. Country A's Current account minus the capital account must equal +$100 billion