A real appreciation will tend to cause
A) an increase in exports.
B) a reduction in imports.
C) an increase in net exports.
D) a reduction in demand for domestic goods.
E) none of the above
D
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The natural rate hypothesis concludes that the inflation rate increases, then in the short run there is
A) a downward movement along the short-run Phillips curve. B) an upward movement along the short-run Phillips curve. C) no change at all in the short-run Phillips curve. D) an upward shift of the short-run Phillips curve. E) a downward shift of the short-run Phillips curve.
Explain the difference between induced consumption expenditure and autonomous consumption expenditure. Why isn't all consumption expenditure induced expenditure?
What will be an ideal response?
The multiplier is calculated as the
A) change in autonomous expenditure/ change in real GDP. B) change in real GDP/ change in induced spending. C) change in real GDP/ change in autonomous expenditure. D) change in nominal GDP/ change in autonomous expenditure.
If a monopoly's Lerner Index exceeds 1, then
A) it is earning maximum profit. B) it has ultimate market power. C) it must be pricing below marginal cost. D) marginal revenue is negative.