According to the misperceptions theory, an anticipated 10% decrease in the money supply leads to a short-run reduction in the price level of
A) 0%.
B) 5%.
C) some amount between 0% and 10%.
D) 10%.
D
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The Big Mac index is a measure of how well the purchasing power parity theory works.
Answer the following statement true (T) or false (F)
In the IS-LM model, equilibrium income can be affected by
A) fiscal policy alone. B) monetary policy alone. C) both fiscal and monetary policy. D) neither monetary nor fiscal policy.
Other things the same, an increase in foreign prices raises the real exchange rate
a. True b. False Indicate whether the statement is true or false
Joey's Lawncutting Service rents office space from Joey's dad for $300 per month. Joey's dad is thinking of increasing the rent to $400 per month. As a result Joey's marginal cost of cutting grass will
A) increase by $100 divided by the amount of grass cut. B) increase by $100. C) decrease by $100. D) not change.