An increase in the policy rate will most likely lead to an increase in:
A. Business investment in fixed assets.
B. Consumer spending on durable goods.
C. The foreign exchange value of the domestic currency.
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A country that targets a stable exchange rate with another countrys currency least likely:
Accepts the inflation rate of the other country.
B. Will sell its currency if its foreign exchange value rises.
C. Must also match the money supply growth rate of the other country.
Sales in the retail sector have been sluggish, and consumer confidence has recently declined, indicating fewer planned purchases. In response, the president sends an expansionary government spending p
A. Discretionary Recognition
B. Automatic Action
C. Discretionary Action
If a market is currently in equilibrium, which of the following is least likelyto cause an imbalance between supply and demand and a deadweight loss to the economy？
A. Subsidies to producers.
B. A legal price floor on the product.
C. A change in the equilibrium market price.
If a government budget deficit increases, net exports must:
A. increase,or the excess of private saving over private investment must decrease.
B. decrease,or the excess of private saving over private investment must increase.
C. decrease,or the excess of private saving over private investment must decrease.
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