A shift of the U.S. demand curve for Mexican pesos to the left and a decrease in the pesos price per dollar would likely result from:
a. an increase in the U.S. inflation rate relative to the rate in Mexico.
b. a change in U.S. consumers' tastes away from Mexican products and toward products made in South Korea, India, and Taiwan.
c. U.S. buyers perceiving that domestically-produced products are of a lower quality than products made in Mexico.
d. all of these.
QUESTION 2The consumption function has a positive slope.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 3When we speak of the national debt, we refer to the federal government debt only.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 4Which of the following would cause the U.S. demand curve for Japanese yen to shift to the right?
a. An increase in the U.S. inflation rate compared to the rate in Japan.
b. A higher real rate of interest on investments in Japan than on investments in the United States.
c. The popularity of Japanese products increases in the United States.
d. All of these.
QUESTION 5John Maynard Keynes explained that the consumption function is a major component of the aggregate expenditures model.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 6The debt ceiling places a legal limit on the size of the national debt.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 7Suppose the exchange rate changes so that more Japanese yen are required to buy a dollar. We could conclude that:
a. the Japanese yen has appreciated in value.
b. U.S. citizens will buy more Japanese imports.
c. Japanese will demand more U.S. exports.
d. U.S. citizens will buy less Japanese imports.
QUESTION 8If autonomous consumption is greater than zero and the marginal propensity to consume is greater than zero, but less than one, the consumption function will first be above and then below the 45 degree line.
a. True
b. False
Indicate whether the statement is true or false