If P = domestic prices, P* = foreign prices, and e is the nominal exchange rate, which of the following is implied by purchasing-power parity?

Meela and Rayann are Canadian residents. Meela buys stock of a corporation in Austria. Rayann opens a coffee shop in Austria. Whose purchase, by itself, decreases Austria’s net capital outflow?

Scenario 2 In October 2013, President Obama and the Republican Party faced a debate regarding tax increases and government spending cuts (the so-called government shutdown). A temporary solution was reached until February 2014, when the debate started again.   Refer to scenario 2. Suppose that President Obama and the Republican Party did not reach an agreement. Hence, taxes increase and government expenditure fell in February 2014. Within the framework of the AD-SRAS-LRAS model discussed in class, what would happen with prices and output in the U.S. economy if it initially starts in a situation of long-run equilibrium?

Hailey deposits money into an account with a nominal interest rate of 5 percent. She expects inflation to be 2 percent. The tax rate is 30 percent. Hailey’s after-tax real rate of interest

If inflation is lower than what was expected,

According to the principle of monetary neutrality, in the long-run, a decrease in the money supply will not change

Barbados has exports of $31.5 million and imports of $30 million.  Barbados

Tristan decides to purchase bonds issued by Brazil instead of ones issued by the United States even though the Brazilian bonds have a higher risk of default. An economic reason for his decision might be that

Figure 2. On the graph, MS represents the money supply and MD represents money demand. The usual quantities are measured along the axes.   Refer to figure 2. Which of the following events could explain a shift of the money-supply curve from MS1 to MS2?

Other things the same, a decrease in velocity means that