In a two-country world, a decrease in foreign input prices, ceteris paribus,
A) shifts the SRAS curve leftward, causing the price level to increase.
B) shifts the SRAS curve leftward, causing the price level to decrease.
C) shifts the SRAS curve rightward, causing the price level to increase.
D) shifts the SRAS curve rightward, causing the price level to decrease.
E) does not affect the SRAS curve or the price level.
D
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If the market price is $3 and a perfectly competitive firm is producing 2,200 units and the marginal cost to produce the 2,200th unit is $2.85, which of the following is true?
A) The firm is maximizing profit. B) The firm should decrease production to maximize profit. C) The difference between marginal revenue and marginal cost (MR - MC) for the 2,200th unit is negative. D) The firm should increase production to maximize profit.
The slope of the typical production possibilities curve:
A. is positive. B. increases as one moves southeast along the curve. C. is constant as one moves down the curve. D. decreases as one moves southeast along the curve.
One major characteristic of the price system is that
A) consumers together are the ones who ultimately decide what is produced. B) individual sellers ultimately decide what is produced in the market. C) competition among sellers is reduced. D) all exchanges are regulated by the government.
To close a recessionary gap, the Fed would
A. decrease the money supply. B. sell bonds. C. increase the money supply. D. increase interest rates.