For this question, assume that policy makers are pursuing a fixed exchange rate regime and that output is initially less than the natural level of output. The economy will tend to move toward the natural level of output when which of the following occur?
A) an increase in the price level
B) a devaluation of the currency
C) an increase in the domestic interest rate
D) a reduction in the foreign price level
E) none of the above
B
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Empiricism refers to the process of:
A) making choices using values and beliefs. B) measuring variables. C) testing ideas using data. D) collecting and organizing data.
One of the assumptions of monopolistic competition is that firms produce differentiated products. What does this assumption imply about the demand curve facing a representative firm?
What will be an ideal response?
A profit-maximizing firm in a competitive market will continue to hire more workers when
A) the marginal factor cost exceeds the marginal revenue product of the additional workers. B) the marginal factor cost equals the marginal revenue product of the additional workers. C) the marginal factor cost is less than the marginal revenue product of the additional workers. D) the marginal factor cost is less than zero.
What do all expansions and recessions since 1950 have in common?
a. Changes in oil prices. b. Changes in interest rates. c. Changes in spending. d. Changes in productivity. e. None of the above.