Table 36-1Suppose the economy of Macroland is described by the following:C = 200 + 0.8 DI (DI = disposable income)I = 300 + 0.2Y?50r (Y = GDP)(r, the interest rate, is measured in percentage points. For example, a 9 percent interest rate is r = 9).For this economy, assume that the Federal Reserve uses its monetary policy to peg the interest rate atr = 5G = 750T = 0.25YX = 200M = 150 + 0.2YHint: DI = Y?T
From Table 36-1, find the budget deficit or surplus for Macroland.

Suppose the market for dollars is in equilibrium, then the expected future exchange rate rises. What effect does this change have on the current exchange rate?

A) It will rise. B) It will fall. C) It will remain unchanged. D) Because both the supply and demand curves shift, the effect on the exchange rate is unpredictable.

Coal producers cannot profit by acting opportunistically toward U.S. Steel because:

a. there is a wide range of coal producers and substitution possibilities are high. b. coal is a highly specific resource and trades at competitive prices. c. the company usually enters into a delivery contract to obtain coal. d. the market for coal is thin.