Which of the following is a major goal of short-run macroeconomic policy?
A. Shift the production possibilities curve outward.
B. Shift the aggregate supply curve to the left.
C. Move toward the production possibilities curve and full employment.
D. None of the choices are correct.
Answer: C
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If good A is a normal good and income increases, the equilibrium price of A ________ and the equilibrium quantity of A ________
A) rises; increases B) rises; decreases C) falls; decreases D) falls; increases
Exchange rate overshooting suggests that an unexpected increase in the domestic money supply by 10 percent will cause the short-run exchange rate value of the domestic currency to
A. appreciate by less than 10 percent. B. depreciate by more than 10 percent. C. depreciate by less than 10 percent. D. appreciate by more than 10 percent.
A shift from D1 to D2 represents
A. an increase in demand.
B. a decrease in demand.
C. no change in demand.
A country recently had a trade deficit of 350 billion euros. Its residents also purchased 400 billion euros of foreign assets. What was the value of this country's assets purchased by foreigners?