When all currencies are tied directly to gold, then
A. the price of each nation's currency in terms of gold is flexible.
B. currency exchange rates throughout the world are flexible.
C. currency exchange rates throughout the world are fixed.
D. the world's stock of gold cannot change.
Answer: C
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Refer to Figure 9.3. If the market is in equilibrium, the producer surplus earned by the seller of the 100th unit is
A) $0.50. B) $0.75. C) $1.50. D) $2.00. E) $2.75.
Using the aggregate supply and demand model, assume the economy is operating along the intermediate portion of the aggregate supply curve. An increase in the money supply will increase the price level and:
a. lower both the interest rate and real GDP. b. raise both the interest rate and real GDP. c. lower the interest rate and raise GDP. d. raise the interest rate and lower real GDP.
If the MPC = 0.5 and there is no crowding out, then the spending multiplier is
a. 2 b. 1 c. 4 d. 0.5
Gross domestic product (measured in real dollars) is an important social tool because it provides
What will be an ideal response?