Figure 19-2
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Of the graphs in Figure 19-2, where the broken line represents the fixed exchange rates, which one shows how a balance of payments deficit could be reduced through a recession in Japan?
A. 1
B. 2
C. 3
D. 4
Answer: B
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Interest rates and investment are actually observed to move most of time in ________, and this is explained by other factors affecting investment shifting the ________ curve to the right
A) the same direction, IS B) the same direction, LM C) opposite directions, IS D) opposite directions, LM
The representative consumer acts competitively
A) when he or she can haggle for a lower price. B) when he or she is a price-taker. C) when he or she is a price-maker. D) if the consumer is large relative to the size of the market.
Assume that the central bank increases the reserve requirement. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and reserve-related (central bank) transactions in the context of the Three-Sector-Model?
a. The real risk-free interest rate rises, and reserve-related (central bank) transactions become more positive (or less negative). b. The real risk-free interest rate rises, and reserve-related (central bank) transactions become more negative (or less positive). c. The real risk-free interest rate rises, and reserve-related (central bank) transactions remain the same. d. The real risk-free interest rate and reserve-related (central bank) transactions remain the same. e. The real risk-free interest rate falls, and reserve-related (central bank) transactions become more negative (or less positive).
Why have social scientists accused economists of being imperialistic?
a. Economists in general are better paid than other scholars. b. The tools of economists are used in many different fields. c. Economists tend to have a superior attitude about their field. d. Politicians view economists as being more important than other scholars.