Scenario 32-5 ​

question 164

Essay

Scenario 32-5
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Suppose that Congress and the President enact legislation that provides a tax rebate to businesses that purchase capital goods. Assume other countries make no policy changes.
-Refer to Scenario 32-5. What happens to the exchange rate, U.S. net exports, and the net exports of foreign countries?

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Definitions:

False Consensus Effect

The tendency to overestimate the extent to which others share our beliefs, attitudes, and behaviors.

Younger People

Refers to individuals in the early stages of their life cycle, typically encompassing children, adolescents, and young adults.

Self-Handicapping

A strategy where people avoid effort in the hopes of keeping potential failure from hurting self-esteem.

Self-Fulfilling Prophecy

A belief or expectation that causes itself to become true due to positive feedback between belief and behavior.