In the short-run, any rise in the real exchange rate, EP /P, will cause
A) an upward shift in the aggregate demand function and a reduction in output.
B) an upward shift in the aggregate demand function and an expansion of output.
C) a downward shift in the aggregate demand function and an expansion of output.
D) an downward shift in the aggregate demand function and a reduction in output.
E) an upward shift in the aggregate demand function but leaves output intact.
B
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Saving
A) slows growth because it decreases consumption. B) finances investment which brings capital accumulation. C) has no impact on economic growth. D) is very low in most East Asian nations. E) is important for a country to gain the benefits of international trade.
Which of the following ideas apply to the neoclassical growth theory?
I. The rate of technological change influences the rate of economic growth. II. Technological change promotes saving and investment. III. Convergence of economic growth rates across countries A) I only B) III only C) I and II D) I, II and III
The cyclical deficit is that portion of the deficit
a. that results from the economy being below the natural rate of output. b. that would exist even if the economy were at its natural rate of output. c. is a function of the level of automatic stabilizers. d. both a and c. d. None of the above
Which of the following is false? a. The price elasticity of demand measures the responsiveness of quantity demanded to a change in price
b. The price elasticity of demand is defined as the percentage change in quantity demanded divided by the percentage change in price. c. If demand is elastic, it means the quantity demanded changes by a relatively larger amount than the price change. d. All of the above are true.