By the 2000s, investment banks had become significant participants in the secondary market for mortgages.
Indicate whether the statement is true or false
Ques. 2If the price level in the United States is 110, the price level is 135 in Mexico, and the nominal exchange rate is 12.5 pesos per dollar, what is the real exchange rate from the U.S. perspective?
A) 8.8 B) 10.2 C) 10.8 D) 11.4
Ques. 3A tax rebate by the government would
A) decrease your pretax income, but not your disposable income.
B) increase your disposable income, but not your pretax income.
C) increase your pretax income, but not your disposable income.
D) decrease your disposable income, but not your pretax income.
Ques. 4Despite saving Lehman Brothers from failing, the Fed and the Treasury decided to allow Bear Stearns to go bankrupt, which it did in September, 2008.
Indicate whether the statement is true or false
Ques. 5If the dollar depreciates against the Indian rupee
A) The value of Indian imports to the United States does not change.
B) Indian imports to the U.S. become less expensive.
C) U.S. exports to India become more expensive.
D) U.S. exports to India become less expensive.
Ques. 6If the absolute value of the tax multiplier equals 1.6, real GDP is 13 trillion, and potential real GDP is 13.4 trillion, then taxes would need to be cut by ________ to restore the economy to potential real GDP.
A) 250 billion
B) 400 billion
C) 640 billion
D) None of the above are correct. Taxes should be increased in this case.
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