In a two-country world, an increase in foreign input prices, ceteris paribus,
A) shifts the SRAS curve leftward, causing the price level to increase.
B) shifts the SRAS curve leftward, causing the price level to decrease.
C) shifts the SRAS curve rightward, causing the price level to increase.
D) shifts the SRAS curve rightward, causing the price level to decrease.
E) does not affect the SRAS curve or the price level.
A
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Suppose a Chinese restaurant provides free tea to its customers. In the economic way of thinking, the restaurant is
A) engaging in predatory pricing of its meals. B) engaging in predatory pricing of tea. C) selling Chinese food below cost. D) doing all of the above. E) almost certainly doing none of the above.
If currencies around the world are based on the gold standard, and the EU lowers the amount of gold for which the euro will trade, then holding all else constant,
A) the euro will depreciate against the dollar. B) the value of U.S. exports to EU countries in terms of the euro will decrease. C) the value of the euro relative to the dollar will stay constant. D) the euro will appreciate against the dollar.
Figure 14-2
If the Fed anticipates that the conditions illustrated by AD2 and SRAS in will be present in the near future, it should
a.
decrease the discount rate.
b.
reduce reserve requirements.
c.
sell U.S. treasury bonds on the open market.
d.
buy U.S. treasury bonds on the open market.
Calculate the Herfindahl-Hirschman Index in this industry
