If foreigners have confidence in the U.S. economy and therefore move to expand their investments in the United States, how will the U.S. current-account balance be affected? How will the exchange-rate value of the dollar be affected?12. Is a trade surplus indicative of a strong, healthy economy? Why or why not?

“Changes in exchange rates will automatically direct a country toa current-account balance under a flexible exchange rate system. “Is this statement true or false? Several members of Congress have been highly critical of Japan and China because U.S. imports from these countries have persistently been substantially greater than our exports to them. a. Under a

How do taxes influence the efficiency of resource use? How much does it cost for the government to raise an additional dollar (or $1billion) of tax revenue? During the past five decades, there has been a shift in the composition of the federal budget toward more spending on income transfers and health care and a

What is the random walk theory of stock prices? What does it indicate about the ability of “experts” to forecast accurately the future direction of stock prices? Are stocks a risky investment? How can one reduce the risk accompanying stock market investments?

Congress is currently considering legislation that would increase both the tax on dividends and the tax on capital gains derived from the appreciation of assets. How would an increase in the tax rate applied to dividends and capital gains income affect stock prices? Why?

What is the underlying message of the following lyrics from Keynes? [Keynes] Public works, digging ditches, war has the same effect.Even a broken window helps the glass man have some wealth.The multiplier driving higher the economy’s health.

Several well-known Keynesian economists argue that the weak recovery of the U.S. economy from the 2008–2009 recession is because the spending increases and budget deficits have been too small. Do you think they are correct? Why or why not? If we continue running large deficits and the economy remains weak, do you think Keynesian economists

Does the national debt have to be paid off at some time in the future? What will happen if it is not? What is the difference between the national debt and privately held federal debt? Why is the distinction between the two important?

How did the Social Security system influence the size of the budget deficit during 1985–2010? How will it influence the deficit during the next two decades? Is this a cause for concern? Why or why not? Does an increase in the national debt increase the supply of money(M1)? Can the money supply increase when the

In the context of the shareholder wealth-maximization model of a firm, what is the expected impact of each of the following events on the value of the firm? Explain why. a. New foreign competitors enter the market. b. Strict pollution control requirements are enacted. c. A previously non-union workforce votes to unionize. d. The rate