Suppose the Chinese yuan increases in its value relative to the U.S. dollar. In the U.S. economy,
A. the price level will fall and real GDP will increase if the increase in aggregate supply is greater than the decrease in aggregate demand.
B. the price level will fall and real GDP will decrease if the decrease in aggregate demand is less than the increase in aggregate supply.
C. the price level will increase and real GDP will fall if the increase in aggregate demand is less than the decrease in aggregate supply.
D. the price level will increase and real GDP will fall if the decrease in aggregate demand is more than the increase in aggregate supply.
Answer: C
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Assuming that travel from New York to Los Angeles is a normal good, a decrease in consumer income, other things being equal, will:
a. decrease the quantity demanded of travel to Los Angeles. b. increase the demand for travel to Los Angeles. c. decrease the demand for travel to Los Angeles. d. increase the quantity of travel to Los Angeles demanded.
According to the special interest theory, the licensing of beauticians would be
a. desired by consumers in order to promote the public interest b. desired by beauticians in order to promote the public interest c. discouraged by all beauty salons, large or small d. desired by some beauticians in order to restrict entry into their profession e. done strictly at the initiative of the government
If something is addictive, then
A) price and demand are inversely related. B) price elasticity of demand is equal to one. C) demand is perfectly inelastic. D) demand is perfectly elastic.
If an economy has a trade deficit, shifting the domestic SAS curve down will shift the globally-constrained potential output to the right.
Answer the following statement true (T) or false (F)