Along the short-run supply curve (SRAS), a decrease in the aggregate demand curve will decrease:
a. both the price level and real GDP
b. real GDP without raising the price level.
c. the price level without affecting real GDP.
d. the price level but reduce real GDP.
a
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A currency's spot exchange rate against every other individual currency is known as a ________ exchange rate, and the exchange rate which shows how a currency is changing relative to a group of other countries' currencies is known as a ________
exchange rate. A) nominal; real B) unilateral; bilateral C) nominal; parity D) bilateral; multilateral
Scatterbrain Samantha often forgets to lock her house. This has caused the probability of a burglary to be 30%. If her house gets broken into, she faces a property loss of $10,000, otherwise she gets to keep her $100,000 . If Samantha is offered an insurance policy for her house to protect her from loss at $3,000, what is her expected wealth?
a. $80,000 b. $87,000 c. $97,000 d. $99,000
The price elasticity of demand for a good measures the willingness of
a. consumers to buy less of the good as price rises. b. consumers to avoid monopolistic markets in favor of competitive markets. c. firms to produce more of a good as price rises. d. firms to respond to the tastes of consumers.
Demand for a good is inelastic if:
A. the quantity effect outweighs the price effect of a price increase. B. the absolute value of price elasticity is greater than 1. C. total revenue decreases when price decreases. D. None of these is true.