The Neoclassical short run impactof a rise in the expected profitability of capi

Question

The Neoclassical short run impactof a rise in the expected profitability of capital under floating exchange rates is illustrated in the AD-AS model as: In the "Neoclassical" short run, with floating exchange rates, a rise in the expected profitability of capital will cause interest rates to and the level of investment in capital to . decrease; decrease decrease; increase increase; decrease increase: increase remain the same; remain the same In the "Neoclassical" short run, with floating exchange rates, a rise in the expected profitability of capital will cause real wages to and employment to . decrease; decrease decrease; increase increase; decrease increase: increase remain the same; remain the same In the "Neoclassical" short run, with floating exchange rates, a rise in the expected profitability of capital will cause nominal wages to and the foreign exchange price of the home currency to . decrease; decrease decrease; increase increase; decrease increase: increase remain the same; remain the same In the "Neoclassical" short run, with floating exchange rates, a rise in expected profitability of capital will cause the current account (trade) surplus to and the capital (financial) account surplus to . decrease; decrease decrease; increase increase; decrease increase: increase remain the same; remain the same In the "Neoclassical" short run, with floating exchange rates, a rise in the expected profitability of capital will cause household consumption and the government budget deficit to . decrease; decrease decrease; increase increase; decrease increase: increase remain the same; remain the same Ceteris paribus, following a rise in the expected profitability of capital. with floating exchange rates, the FED should its overnight federal funds rate target to avoid spiraling . Lower; inflation lower; deflation raise; deflation raise; inflation None of the above are correct. As the economy adjusts in the short run to this increase in the expected profitability of capital with fixed exchange rates, net tax revenues and average propensity to tax will . rise; rise rise; fall fall; rise fall; fall None of the above are correct. As the economy adjusts in the short run to this increase in the expected profitability of capital with fixed exchange rates, the money supply will and net exports will . rise; rise rise; fall fall; rise fall; fall None of the above are correct. The long run impact of a decrease in the labor force with floating exchange rates is illustrated in the ASAD model as: As the economy adjusts in the long run to a decrease in the labor force with floating exchange rates, the level of interest rates will and investment in new plant and equipment will . rise; rise rise; fall fall; rise fall; fall None of the above are correct. As the economy adjusts in the long run to a decrease in the labor force with floating exchange rates, the relative price of domestic goods in terms of foreign goods will and net exports will . rise; rise rise; fall fall; rise fall; fall None of the above are correct. As the economy adjusts in the long run to a decrease in the labor force with floating exchange rates, the government's budget surplus will and the government's potential budget surplus will . rise; rise rise; fall fall; rise fall; fall None of the above are correct. Ceteris paribus, following a decrease in the labor force with floating exchange rates, the FED should its overnight federal funds rate target to avoid spiraling . lower; inflation lower; deflation raise; deflation raise; inflation None of the above are correct.

Explanation / Answer

d a e e b c

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