Overshooting occurs when exchange rates
A. adjust by more in the short run than they do in the long run.
B. continually diverge away from the long-run equilibrium.
C. become volatile suddenly.
D. adjust faster in the long run than they do in the short run.
Answer: A
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An increase in the real interest rate in the United States changes the quantity of loanable funds demanded because
a. U.S. residents will want to buy more foreign assets. b. Foreign residents will want to buy more U.S. goods and services. c. U.S. firms will want to purchase fewer U.S. capital goods. d. All of the above are correct.
In fiscal year 1997, the U.S. government ran a deficit of about $21.9 billion. In fiscal year 1998, the government ran a surplus of about $69.3 billion. Other things the same, we would expect this change
a. decreased interest rates and investment. b. decreased interest rates and increased investment. c. increased interest rates and investment. d. increased interest rates and decreased investment.
The top federal personal income tax bracket is now _______ percent.
A. 25 B. 35 C. 55 D. 70
Which of the following is NOT an important source of revenue for the federal government?
A. property taxes B. individual income taxes C. corporate income taxes D. social insurance taxes and contributions