Which of the following is incorrect?
A. As the price level falls, the demand for money declines, the interest rate declines, and interest-rate-sensitive spending increases.
B. As the U.S. price level rises, U.S. goods become relatively more expensive so that U.S. exports fall and U.S. imports rise.
C. Given aggregate demand, an increase in aggregate supply increases real output and, assuming downward-flexible prices, reduces the price level.
D. When the price level increases, real balances increase and businesses and households find themselves wealthier and therefore increase their spending.
Answer: D. When the price level increases, real balances increase and businesses and households find themselves wealthier and therefore increase their spending.
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Total taxes minus transfer payments minus government interest payments is called:
A. a budget surplus. B. a budget deficit. C. national saving. D. net taxes.
The fact that the prices for McDonald's Big Mac sandwich are not the same around the world illustrates one reason why purchasing power does not hold: Many goods are not traded internationally
Indicate whether the statement is true or false
Figure 13-2
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In Figure 13-2, which of the graphs represents a monopolistic competitor in long-run equilibrium?
A. 1 B. 2 C. 3 D. 4
At Nick's Bakery, the cost to make a cheese danish is $1.50 per danish. As a result of selling ten danishes, Nick experiences a producer surplus in the amount of $20 . Nick must be selling his danishes for
a. $2.00 each. b. $0.50 each. c. $3.50 each. d. $5.00 each.