Suppose consumers and business decision makers become more optimistic about the future, and aggregate expenditures increase. The most likely result is that:
A. real GDP and employment and income to decline.
B. real GDP and employment rise.
C. real GDP rises and employment falls.
D. real GDP falls and employment rises.
Answer: B
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A shock to the economy is a change in
a. production that only affects a few sectors b. production that initially affects the whole economy and then one or more sectors c. spending or production that initially affects one or more sectors and then spreads throughout the whole economy d. spending that only affects a few sectors e. spending that initially affects the whole economy and then one or more sectors
Which of the following is consistent with moving from a shortage to equilibrium in the market for foreign currency exchange?
a. the exchange rate falls so foreign residents want to buy more U.S. goods and services b. the exchange rate falls so foreign residents want to buy fewer U.S. goods and services c. the exchange rate rises so foreign residents want to buy more U.S. goods and services d. the exchange rate rises so foreign residents want to buy fewer U.S. goods and services
Brook is spending all of her income consuming products X and Y. If MUx/Px=1 and MUy/Py=6, what should Brooke do to maximize her satisfaction?
A. Buy more X and more Y B. Buy more X and less Y C. Buy less X and less Y D. Buy less X and more Y E. Make no changes
Shift to the left or right for supply:price of product
What will be an ideal response?