An increase in the dollar price of the British pounds will:
A. Increase the pound price of dollars
B. Decrease the pound price of dollars
C. Leave the pound price of dollars unchanged
D. Cause Britain's terms of trade with the United States to deteriorate
B. Decrease the pound price of dollars
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If the Fed buys government bonds from the open market, it will cause:
A) a shift of the supply curve for reserves to the right. B) a shift of the supply curve for reserves to the left. C) a downward movement along the supply curve for reserves. D) an upward movement along the supply curve for reserves.
To close an inflationary gap through fiscal policy, the government should
a. decrease government spending in order to reduce aggregate demand. b. increase government spending and taxes in order to both increase aggregate demand and aggregate supply. c. decrease government spending in order to increase aggregate supply. d. reduce taxes in order to stimulate investment, and thus increase aggregate supply.
Water has a higher total utility (usefulness) than diamonds, but it is much less expensive than diamonds. This is because whereas diamonds are rare, water is plentiful, making the marginal utility of diamonds much higher than the marginal utility of water. What are two other goods that you can think that demonstrate that price is determined not by total utility but by marginal utility? Explain how these goods demonstrate the same principles.
What will be an ideal response?
In constructing a demand curve for product X:
A. consumer preferences are allowed to vary. B. the prices of other goods are assumed constant. C. money incomes are allowed to vary. D. the supply curve of product X is assumed constant.