A currency appreciation should
A. reduce net exports and therefore increase aggregate demand.
B. raise net exports and therefore decrease aggregate demand.
C. reduce net exports and therefore decrease aggregate demand.
D. raise net exports and therefore increase aggregate demand.
Answer: C
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A point outside a production possibilities frontier indicates
A) that resources are not being used efficiently. B) an output combination that society cannot attain given its current level of resources and technology. C) that resources are being used very efficiently. D) that both goods are characterized by increasing costs.
If the population growth rate is 2%, the incremental capital output ratio is 3, the saving ratio is 24%, and the depreciation rate is 5%, the rate of growth of income is
(a) 1%. (b) 2%. (c) 3%. (d) 5%. (e) 8%.
A professor will sometimes pay higher prices for some goods compared to an undergraduate student because
a. They value the item more than the student b. They like wasting money c. crowded and understaffed discount stores impose higher time costs d. they like to show off
Bad risks may be the most willing to pay high interest rates and thus get loans. This describes an example of
a. symmetrical information b. adverse selection c. natural selection d. moral hazard e. the winner's curse