A rise in the price level has a direct effect on spending because
A) the real value of the money people have decreases and they can buy less with it.
B) a higher price gives people more money, and so the more goods and services they can buy.
C) the real value of the money people have varies directly with the price level.
D) people like to spend more when prices are higher.
A
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Consider the currency market for British pounds and U.S. dollars. A decrease in the supply of British pounds results in a(n) ________ of the pound and a(n) ________ of the dollar.
A. appreciation; depreciation B. appreciation; appreciation C. depreciation; depreciation D. depreciation; appreciation
On a typical acre of land, Iowa can produce either 300 pounds of beef or 100 pounds of soybeans in a year. On a typical acre of land, Nebraska can produce 150 pounds of beef or 200 pounds of soybeans. Which of the following is correct?
A) Nebraska should produce soybeans because its opportunity cost of soybeans is lower. B) Nebraska should produce soybeans because its opportunity cost of soybeans is higher. C) Iowa should produce soybeans because its opportunity cost of soybeans is lower. D) Iowa should produce soybeans because its opportunity cost of soybeans is higher. E) Nebraska and Iowa should divide each acre evenly between soybean and beef production.
Statistical evidence suggests that
A) free trade policies promote economic growth more effectively than do import substitution policies. B) import substituting policies tend to promote effective exploitation of scale economies. C) import substitution tends to lead to relatively low effective rates of protection. D) import substitution is to this day the preferred growth strategy promoted by the World Bank. E) import substitution proved to be the most effective aid for developing countries before 1970.
According to the graph shown, the profits at point A are:
A. higher than those at point B. B. the same as those at point B. C. higher than those at point C. D. lower than those at point B.