For a given level of inflation, if there is a greater willingness by foreigners to purchase domestic goods, then the ________ shifts ________.
A. aggregate demand curve; right
B. aggregate demand curve; left
C. short-run aggregate supply line; downward
D. short-run aggregate supply line; upward
Answer: A
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In the foreign exchange market, the quantity supplied of dollars is 300 whereas the quantity demanded of dollars is 500 results in a:
A) balance of payments surplus of 200. B) balance of payments deficit of 200. C) balance of payments surplus of -200. D) balance of payments deficit of -200.
A tax on wages will
a. reduce labor supply since leisure becomes cheaper. b. raise labor supply since income is reduced. c. have an unpredictable impact on labor supply since there are both substitution and income effects. d. have a predictable impact since economists know substitution effects will dominate.
The law of supply states that, other things equal, when the price of a good rises, the quantity supplied of the good falls
a. True b. False Indicate whether the statement is true or false
The second largest category, by relative importance, in the CPI calculation is
a. housing. b. apparel. c. transportation. d. medical care.