In the aggregate expenditures model, if aggregate expenditures (AE) equal $4 trillion and GDP equals $3 trillion, then:
a. inventory depletion equals ?$1 trillion.
b. inventory accumulation equals $1 trillion.
c. investment equals ?$1 trillion.
d. investment equals $1 trillion.
a
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Suppose the interest rate on six-month treasury bills is 7 percent per year in the United Kingdom and 4 percent per year in the United States. Also, today's spot exchange price of the pound is $2.00. If the price of the six-month forward pound is ________, U.S. investors would see no return difference between covered U.K. investment and domestic U.S. investment.
A. $1.94 B. $1.99 C. $1.97 D. $2.01
The substitution effect of an increase in the wage rate on the quantity of leisure demanded
A. gives people less purchasing power and so they will demand less leisure. B. makes leisure more expensive which leads people to work more. C. gives people more purchasing power and causes people to demand more leisure. D. makes leisure less expensive which causes people to work less.