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Hi! I’m between a few answers on 5 of these questions and am unsure of which to select for the correct answer. You don’t have to provide an explanation! That is provided after I submit. A letter corresponding to the answer is enough. Thank you!
A country’s achievement of a reasonable and sustainable balance of payments with the rest of the world is the country’s:
a. external balance.
b. economic equilibrium.
c. internal balance.
d. short-run equilibrium.
Higher interest rates increase the cost of borrowing, thus:
a. increasing foreign direct investment.
b. increasing disposable income.
c. decreasing domestic tax rates.
d. reducing the amount of real investment undertaken in an economy.
The IS curve illustrates all combinations of domestic output levels and interest rates for which:
a. the domestic product market is in equilibrium.
b. the domestic money market is in equilibrium.
c. there is a zero balance in the country’s official settlements balance.
d. there is full employment.
In the IS-LM model, nominal interest rates equal real interest rates because we assume that in the short run
a. the exchange rate is fixed.
b. the price level is fixed.
c. the output level is fixed.
d. the tax rate is fixed.
Equilibrium GDP in the short run is determined at the point where:
a. gross domestic production equals aggregate demand.
b. domestic production equals domestic consumption.
c. imports equal exports.
d. the rate of unemployment equals zero.
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