Supply-side economists favor tax incentives that Multiple Choice O Discourage saving and encourage spending. O Discourage infrastructure development. O Increase the level of government regulation. O Encourage investment.A progressive tax system Multiple Choice O Provides more work incentives than a system with constant marginal tax rates. O Promotes more investment than a system with constant marginal tax rates. O Means higher marginal tax rates at higher income levels. O Means lower marginal tax rates at higher income levels.Aggregate Supply Price Level Inflation Rate Unemployment Output Rate (a) (b) Aggregate Aggregate Supply Supply Price Level Price Level Aggregate Aggregate Demand Demand Output Output (c) (d) Figure 16.1 Choose the letter of the diagram in Figure 16.1 that illustrates the effects of supply-side policies designed to increase the capacity of the economy.Tariffs and quotas on imported goods used as inputs in production shift the Multiple Choice O AS curve to the right. O AS curve to the left. O AD curve to the right. O None of the choices are correct.The Phillips curve illustrates the Multiple Choice O Inverse relationship between the price level and the level of output. O Direct relationship between the unemployment rate and the inflation rate. O Direct relationship between the price level and the level of output. O Inverse relationship between the unemployment rate and the inflation rate.According to supply-side theorists, taxes Multiple Choice O Alter disposable income only. O Alter disposable income and affect the incentives to work only. O Alter disposable income and affect the incentives to work and produce. O None of the choices are correct.Which of the following is an accurate statement about the aggregate supply curve? Multiple Choice O The Keynesian view is that it is vertical. O Keynesians view it as vertical up until full employment, at which point it becomes horizontal. O The consensus view is that it begins as horizontal, then starts to slope upward to the right as the economy approaches full employment, and eventually becomes vertical beyond full employment. O Monetarists view it as horizontal.Increased investment in infrastructure will shift Multiple Choice O Both the Phillips curve and aggregate demand to the left. O Both aggregate supply and aggregate demand to the right. O The Phillips curve to the right. O Aggregate supply to the right and aggregate demand to the left.The misery index is the Multiple Choice O Unemployment rate minus the interest rate. O Inflation rate plus the unemployment rate. O Inflation rate plus the interest rate. O Inflation rate minus the unemployment rate.Stagflation refers to Multiple Choice O Negative inflation rates. O The simultaneous occurrence of higher inflation and higher unemployment rates. O Inflation resulting from lower unemployment rates. O Simultaneous decreases in inflation rate and unemployment rate.The exchange rate is the Multiple Choice O Amount of currency that can be purchased with one ounce of gold. O Opportunity cost at which goods are produced domestically. O Price of one country's currency expressed in terms of another country's currency. O Balance-of-trade ratio of one country to another.With flexible exchange rates Multiple Choice O The equilibrium exchange rate is determined in a foreign exchange market. O The balance of trade is zero. O Foreign exchange reserves are used to offset balance-of-payment deficits. O All countries will run either a trade surplus or trade deficit.Ceteris paribus, if Canadians decide they want to eat more U.S.-grown soybeans, this causes the U.S. currency to Multiple Choice O supply of; decrease O demand for; decrease O demand for; increase O supply of; increaseWhen foreigners buy U.S. dollars because they are a more stable currency than the currencies in their countries, they are generating a Multiple Choice O Supply of U.S. dollars and a supply of a foreign currency. O Demand for U.S. dollars and a demand for a foreign currency. O Supply of U.S. dollars and a demand for a foreign currency. O Demand for U.S. dollars and a supply of a foreign currency.The depreciation of a country's currency causes the price of imports to Multiple Choice Rise and the prices of exports to fall. Fall and the prices of exports to rise. Fall and the prices of exports to fall; 0 O O 0 Rise and the prices of exports to rise. Theoretically, the net balance of payments is Multiple Choice O Foreign demand for a country's currency minus foreign supply. O Exports minus imports. O A country's capital inflow minus its capital outflow. O The current account plus the capital account.An Increase in the price of the US. dollar In terms of euros will cause. ceten's paribus. Multiple Choice Higher interest rates in the United States. European goods to be more expensive to residents of the United States. European goods to be cheaper to residents of the United States. 0 O O O A lower European ination rate. When foreigners buy U.S. dollars because they are a more stable currency than the currencies in their countries, they are generating a Multiple Choice O Demand for U.S. dollars and a supply of a foreign currency. O Supply of U.S. dollars and a supply of a foreign currency. O Demand for U.S. dollars and a demand for a foreign currency. O Supply of U.S. dollars and a demand for a foreign currency.A "dirty float" is a system Multiple Choice O Of managed exchange rates. O Of fixed exchange rates. O Based on the gold standard. O Of free-floating exchange rates.Suppose that today 1 British pound exchanges for $1.60. If next week 1 pound exchanges for $1.70, it is clear that Multiple Choice O The pound has depreciated relative to the dollar. O The dollar has appreciated relative to the pound. O The dollar has depreciated relative to the pound. O Both currencies have appreciated.A summary record of a country's international economic transactions in a given time period is the Multiple Choice O Current account. O Capital account. O Balance of payments. O Exchange rate balance.120 yen (in yen per dollar) VALUE OF DOLLAR 100 yen mill D QUANTITY OF DOLLARS Figure 36.4 Refer to Figure 36.4 for the dollar-yen foreign exchange market. A decrease in demand from D, to Do could have been caused byMU lple Choice A quota placed on Japanese television imports to the United States. A poor performance by the Japanese stock market compared to the US. stock market An Increase in the number of Japanese visitors to the United States. A decrease In the demand for U. 5. computers. 0 O O O Foreign exchange reserves are Multiple Choice O Holdings of foreign exchange by individual citizens. O Held illegally by many countries. O Used by the Federal Reserve in open market operations. O Holdings of foreign exchange by official government agencies.A currency bailout Multiple Choice O Occurs when money is borrowed from an economy to increase the value of its currency. O Is considered to be a dangerous move by the central banks of the strongest economies worldwide. O Is considered to be a dangerous move by the International Monetary Fund. O Can help avoid a situation in which a weakness in one currency undermines other currencies.The article on China's $4 trillion of reserves indicates that the yuan's depreciation is due to Multiple Choice O Intervention of the Chinese government to purchase dollars to suppress the yuan. O Intervention of the U.S. government to cause the dollar to depreciate. O Intervention on the part of the U.S. government to devalue the yuan. O Intervention of the Chinese government into the exchange markets to purchase yuan.The capital account balance is equal to the Multiple Choice O U.S. purchases of foreign assets minus foreign purchases of U.S. assets. O Current account balance plus foreign purchases of U.S. assets. O Foreign purchases of U.S. assets minus U.S. purchases of foreign assets. O Current account balance plus U.S. purchases of foreign assets.Exports minus imports define a country's Multiple Choice O Current account balance. O Trade balance. O Capital account balance. O Balance of payments.The trade balance for the United States equals Multiple Choice O The current account balance minus the capital account balance. O The difference between the dollar value of exports and the dollar value of imports. O The difference between service exports and service imports. O Exports plus imports.Ceteris paribus, if interest rates in the United States rise relative to those abroad, then the surplus in the U.S. capital account would Multiple Choice O Become smaller and the dollar would appreciate. O Become smaller and the dollar would depreciate. O Grow larger and the dollar would appreciate. O Grow larger and the dollar would depreciate.Which of the following generates a demand for dollars in the foreign exchange market? Multiple Choice O Foreign aid given by the United States. O U.S. military installations abroad. O Transfers of money by foreign workers in the United States to relatives abroad. O Travel by foreign visitors in the United States.If a PlayStation 4 costs 35,000 yen in Japan, how much will it cost in US. dollars if the exchange rate is lnstructlons: Round your responses to two decimal places. Do not round intermediate calculations. a. 150 yen = $1? $E b. 1 yen = $0008? $E c. 180 yen : $1? $: cl. Interest rates in the United States drop. '3 Rise 0 Fall e. The United States experiences rapid increases in productivity. '3 Rise 0 Fall f. Anticipating a return to the gold standard, Americans suddenly rush to buy gold from the two big producers, South Africa and the Soviet Union. 0 Rise 0 Fall g. War is declared in the Middle East. 0 Rise 0 Fall \fItem billions) 1. Merchandise exports $1, 460 2. Merchandise imports (2, 210 ) 3. Service exports 752 4. Service imports (503) Trade balance (items 1-4) -501 5. Income from U.S. overseas investments 802 6. Income outflow for foreign- owned U.S. investments (621) 7. Net transfers and pensions (161 ) Current account balance -481 (items 1-7) 8. U. S. capital inflow 759 9. U.S. capital outflow -331 Capital account balance (items 8-9) 428 10. Statistical discrepancy 53 Net balance (items 1-10) O In 2016 the United States was running a current account deficit. Would the following events increase or decrease the current account deficit?a. U.S. companies, the largest investors in Switzerland, see even more promising investment opportunities there. Increases the current account deficit Decreases the current account deficit Does not affect the current account deficit b. The Netherlands, one of the largest foreign investors in the United States, finds U.S. investment opportunities less attractive. Decreases the current account deficit Increases the current account deficit Does not affect the current account deficit c. Unemployment rises and recession deepens in the United States. Decreases the current account deficit Increases the current account deficit Does not affect the current account deficitCO PC 2 PC , Rightward AS shifts cause leftward Phillips curve shifts. Inflation Rate (percent) 4 2 O 0 1 2 3 4 5 6 7 8 Unemployment Rate (percent) What inflation rate would occur if the unemployment rate were 5 percent, with\fThe results are that a. The equilibrium rate of output (Click to select) v . b. The equilibrium price level (Click to select) v . c. Unemployment - AS Price Level(average price per unit of output) AD O Output(real GDP per period)The results are that a. The equilibrium rate of output (Click to select) b. The equilibrium price level (Click to select) c. Unemployment (Click to select)