Questions from Macroeconomics


Q: Why did China raise reserve requirements in 2011? How did they

Why did China raise reserve requirements in 2011? How did they expect consumers and businesses to respond?

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Q: Why might the Fed want to decrease the money supply?

Why might the Fed want to decrease the money supply?

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Q: Why might China’s monetary restraint (World View, p. 321

Why might China’s monetary restraint (World View, p. 321) not have worked?

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Q: Why were banks reluctant to use their lending capacity in 2008?

Why were banks reluctant to use their lending capacity in 2008? (See News, p. 322.) What did they do with their increased reserves?

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Q: Why did Fed Chairman Bernanke expect there would be no recession in

Why did Fed Chairman Bernanke expect there would be no recession in 2008? Why was he wrong?

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Q: Should military spending be subject to macroeconomic constraints? What programs should

Should military spending be subject to macroeconomic constraints? What programs should be expanded or contracted to bring about needed changes in the budget? Is this feasible?

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Q: How does international trade restrain the price behavior of domestic firms?

How does international trade restrain the price behavior of domestic firms?

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Q: Whose real wealth (see Table 7.3) declined in

Whose real wealth (see Table 7.3) declined in the 1990s? Who else might have lost real income or wealth? Who gained as a result of inflation? Table 7.3:

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Q: Is a stronger dollar good or bad for the United States?

Is a stronger dollar good or bad for the United States? Explain.

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Q: Would you invest in Cambodia or Kenya on the basis of the

Would you invest in Cambodia or Kenya on the basis of the information in Figure 21.5?

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