Under a floating exchange-rate regime, in the very short run (before the exchange rate adjusts), expansionary fiscal policy will lead to
A. improvement in the current account but deterioration in the financial account.
B. deterioration in the current account but improvement in the financial account.
C. improvement in both the current account and financial account.
D. deterioration in both the current account and financial account.
Answer: B
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A temporary adverse supply shock directly causes
A) a shift down and to the left of the IS curve. B) a shift to the left of the FE line. C) a shift down and to the right of the LM curve. D) a shift up and to the right of the IS curve.
An antitrust agency is identifying the product market for Good X and determines that Good X and Good Y have a cross-price elasticity of 0.01. As a result of the cross-price elasticity, the antitrust agency is likely to ________ Good Y from Good X's product market as the products ________ compete as close substitutes.
A) exclude; do B) include; do C) exclude; do not D) include; do not
In an open economy, how many TVs will this country import?
A. 120,000 B. 60,000 C. 30,000 D. 90,000
The act of selling an item in slightly altered forms at different prices and to different groups of consumers is known as
A) bundling. B) versioning. C) tie-in sales. D) lemons marketing.