A nation can determine how close it is to the classical range by considering its:
a. Employment rate.
b. Net export position.
c. Exchange rate
d. None of the above.
.A
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When the Fed eases U.S. monetary policy, domestic interest rates ________, making U.S. assets relatively less attractive to foreign investors, and ________ the equilibrium exchange rate.
A. rise; increasing B. fall; decreasing C. fall; increasing D. rise; decreasing
Firms in monopolistic competition maximize their profit by setting their price equal to their marginal revenue
Indicate whether the statement is true or false
Keynes believed that
A) the internal structure of the economy is extremely competitive and that wage-price flexibility exists. B) monopolistic elements in the economy prevent immediate and sharp price declines in response to falling demand. C) even though there are monopolistic elements in the economy, wage-price flexibility exists. D) in spite of the competitiveness of the economy, wage-price flexibility does not exist.
The slope of the consumption function is equal to the marginal propensity to save (MPS)
a. True b. False Indicate whether the statement is true or false