According to the Bureau of Economic Analysis (BEA), personal consumption expenditures grew at an annualized rate of 0.5% in August 2012, and this increase in spending was accompanied by income growth
If you were building a macroeconomic model that explores the effect of the growth in income on the increase in consumer spending, the growth in income would be an ________ variable and the increase in consumer spending would be an ________ variable. A) endogenous; endogenous
B) endogenous; exogenous
C) exogenous; exogenous
D) exogenous; endogenous
D
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If the exchange rate between the U.S. dollar and the Mexican peso (pesos per dollar) is less than the relative purchasing power between the two countries, which of the following would be true?
A) Purchasing power parity predicts that the dollar is overvalued as traders take advantage of arbitrage opportunities. B) Purchasing power parity predicts that the value of the dollar will fall as traders take advantage of arbitrage opportunities. C) There are opportunities for profit by purchasing goods in the United States and then selling them in Mexico. D) There are no arbitrage opportunities for which traders can take advantage.
A market with few entry barriers and with many firms that sell differentiated products is
A) purely competitive. B) a monopoly. C) monopolistically competitive. D) oligopolistic.