Say's law assures us that in the classical model, total spending is always enough to purchase the economy's total output
a. True
b. False
A
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Assuming no change in the nominal exchange rate, how will a lower rate of inflation in the United States relative to Canada affect the real exchange rate between the two countries? (Assume the United States is the "domestic" country.)
A) The real exchange rate will rise. B) The impact on the real exchange rate cannot be predicted. C) The real exchange rate will be unaffected. D) The real exchange rate will fall.
How does a dominant firm try to prevent new competitors from entering the oligopoly market?
In the mid- to late 1980s, the United States had "twin deficits" because both ________ and ________ were negative.
A. government saving; private saving B. the current account; investment C. saving; investment D. government saving; the current account
Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower