A country is using a beggar-thy-neighbor policy whenever:
A) it uses contractionary monetary policy to attract capital inflows from other countries.
B) it devalues its currency to improve its macroeconomic position at the expense of its trading partners.
C) it revalues its currency to improve its macroeconomic position and that of its trading partners.
D) it cooperates with other countries in establishing its monetary policy.
Ans: B) it devalues its currency to improve its macroeconomic position at the expense of its trading partners.
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The authors note that an appropriate discount rate for most U.S. households is near 5%. However, suppose you are considering the decision to attend graduate school, and you already have large credit card balances from your undergraduate years
If you decide to use a higher discount rate (e.g., 10%) to reflect your higher opportunity cost of money, what impact does this change in the discount rate have on the net present value of a graduate degree? A) Increases NPV B) Decreases NPV C) NPV would not change as long as we use nominal costs and returns. D) NPV may increase or decrease, and we cannot determine the direction of change without more information.
Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C