Assume That Macroland Is a Country That Imports 70% of the Inputs

question 248

Multiple Choice

Assume that Macroland is a country that imports 70% of the inputs used in its production and 40% of the products consumed. It has an overall trade balance. Which of the following events would cause Macroland's short-run aggregate supply curve to shift to the left?

• A) an increase in the average education level of the labor force
• B) a depreciation in the value of Macroland's currency
• C) an increase in consumption taxes and a decrease in corporate income taxes
• D) a surge in the value of stocks exchanged on Macroland's stock market

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Definitions:

Stock

A share in the ownership of a company, representing a claim on the company's assets and earnings.

Bonds

Financial instruments representing a loan made by an investor to a borrower, typically corporate or governmental, which are obligated to pay back with interest.

Investment Incentives

Benefits, typically in the form of tax reductions or credits, offered to encourage investment by individuals and corporations.

Loanable Funds

A term referring to all the money available for borrowing in the financial markets, from various sources including savings and investments.