Imagine two economies that are identical except that for a long time, economy A has had a money supply of $1,000 billion while economy B has had a money supply of $500 billion. It follows that
a. real GDP and the price level are lower in country B.
b. real GDP, but not the price level, is lower in country B.
c. the price level, but not real GDP is lower in country B.
d. neither the price level or real GDP is lower in country B.
c
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If a government runs a fixed exchange rate system and increases the dollar price of its currency, we say there has been a(n)
a. appreciation of the foreign currency b. depreciation of the foreign currency c. revaluation of the foreign currency d. devaluation of the foreign currency e. fixing of the foreign currency
What will happen in the economy if the government increases spending and increases taxes by equal amounts to pay for that additional government spending?
What will be an ideal response?
The United States decides what goods to produce by letting
a. only the government decide b. members of Congress decide c. only the producers decide d. the producers and consumers decide