A fall in tao the effective tax rate on capital will

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Exploring Macroeconomics
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Chapter 14 / Exercise 13
Exploring Macroeconomics
Sexton
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32.A fall in tao, the effective tax rate on capital will result in the investment demand function shifting to the right.A) TrueB) FalseCorrect Answer(s):True
Points Earned:1.0/1.0
33.The slope of the investment demand function indicates how sensitive investment is to changes in real interest rates. The 'flatter' the investment demand function, the less sensitive investment is to changes in the real rate of interest, all else constant.
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34.A rise in imports, all else constant, will increase net exports.
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35.
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Exploring Macroeconomics
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Chapter 14 / Exercise 13
Exploring Macroeconomics
Sexton
Expert Verified
If the US is growing faster than the rest of the world, then all else constant, the trade deficit will widen (get more negative assuming we were running a trade deficit to begin with).
Points Earned:1.0/1.0
36.If the inflation rate rises in China so that it exceeds that of the US, then net exports for the US should increase, all else constant.A) TrueB) FalseCorrect Answer(s):True
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37.If the exchange rate between the US dollar and Japanese yen changes from $1 = 100 yen to $1 = 80 yen, then US exports to Japan will become more expensive to Japanese importers.
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38.We argued that cash flow (CF) increased during the Great Recession and thus, had a positiveeffect on investment.
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39.In a consumption function with income (Y) on the horizontal axis and consumption (C) on thevertical axis, a rise in stock market wealth, all else constant, will result in a movement along the consumption function.
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40.The stronger the US dollar is relative to the rest of the world, all else constant, the larger thenet exports in the US.A) TrueB) FalseCorrect Answer(s):False
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41.A fall in the tax rate on capital will cause the aggregate expenditure curve to shift up and the aggregate demand curve to shift to the left, all else constant.
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42.One reason that the aggregate demand curve slopes downward is that when prices rise, say in the US, the relative price of imports fall and thus, US citizens substitute away from domestically produced goods toward imported goods and thus, GDP in the US will fall (all else constant).
Points Earned:1.0/1.0

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