According to purchasing-power parity, if it took 1,100 Korean Won to buy a dollar this year, but it took 1,000 to buy it last year, then the dollar has
a. appreciated, indicating inflation was higher in the U.S. than in Korea.
b. appreciated indicating inflation was lower in the U.S. than in Korea.
c. depreciated indicating inflation was higher in the U.S. than in Korea.
d. depreciated indicating inflation was lower in the U.S. than in Korea.
b
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Fiscal expansion
A) stimulates aggregate demand and causes output to decline. B) decreases aggregate demand and causes output to decline. C) stimulates aggregate demand and causes output to rise. D) decreases aggregate demand and causes output to rise. E) decreases government expenditures.
If you sold a short futures contract you will hope that bond prices
A) rise. B) fall. C) are stable. D) fluctuate.
You won the "$1,000 per year forever" lottery. You decided to convert such prize into a lump sum payment. The interest rate is 2% per year. How much is this lump sum payment?
A) $25,000 B) $1,000 C) $50,000 D) $365,000
Which could be sources of funding for a government that wants to increase government expenditures?
A. both taxes and borrowing B. borrowing only C. neither taxes nor borrowing D. taxes only