An increase in the relative price of a good cannot be caused by
A) an increase in the nominal price of the good that is greater than the increase in the nominal price of the other good.
B) a decrease in the nominal price of the good that is less than the decrease in the nominal price of the other good.
C) a decrease in the nominal price of the other good while the price of the good itself remains constant.
D) an increase in the nominal price of the other good while the price of the good itself remains constant.
Answer: D
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To stabilize interest rates, the Federal Reserve will respond to an increase in money demand by
a. buying government bonds, which decreases the supply of money. b. selling government bonds, which increases the supply of money. c. buying government bonds, which increases the supply of money. d. selling government bonds, which decreases the supply of money.
An economy in which output has decreased and prices have decreased would suggest a:
A. decrease in short-run aggregate supply. B. increase in aggregate demand. C. increase in short-run aggregate supply. D. decrease in aggregate demand.
Accurately incorporating the present consequences of an action, but ignoring or underestimating the future consequences, is a description of present bias.
Answer the following statement true (T) or false (F)
Refer to Figure 11.5. A decrease in the marginal propensity to import is best illustrated by diagram
A) A. B) B. C) C. D) D.