Suppose that a Japanese firm invents an affordable long-lasting battery that becomes hugely popular in the United States. What would be the result?
a. U.S. demand for the Japanese yen would fall.
b. U.S. demand for Japanese goods would decline.
c. U.S. demand for the Japanese yen would increase.
d. The exchange value of the Japanese yen would fall relative to other currencies.
c. U.S. demand for the Japanese yen would increase.
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When the economy enters an expansion of a business cycle, households become more optimistic about expected future disposable income. The increase in optimism leads to
A) a shift upward of the consumption function. B) a movement downward along the consumption function. C) no change in the level of consumption expenditures. D) an increase in consumption expenditures. E) a movement upward along the consumption function.
During 2013, a country's total purchases of newly produced capital goods are $1,000 billion, the country issues $750 billion of stock certificates, and there is $200 billion of depreciation. Net investment in this country equals
A) $550 billion. B) $1,000 billion. C) $1,550 billion. D) $1,750 billion. E) $800 billion.
Interest differentials cause exchange rate changes
Indicate whether the statement is true or false
An argument against inflation targeting is that
a. the Fed does not completely control inflation. b. it rules out stabilization policy. c. puts too much emphasis on low inflation. d. All of the above