Which of the following would not explain why the aggregate demand curve slopes downward?
a) A higher price level increases real wealth, which stimulates spending on consumption.
b) A lower price level reduces the interest rate, which encourages greater spending on investment goods.
c) A lower price level causes U.S. interest rates to fall, the real value of the dollar to decline in foreign exchange markets, and U.S. net exports to rise.
d) A higher price level lowers the real value of money and makes consumers poorer, which in turn encourages them to spend less.
Ans: a) A higher price level increases real wealth, which stimulates spending on consumption.
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Transactions deposits include
A) credit cards. B) certificates of deposit. C) lines of credit. D) checkable and debitable accounts.
When an economy experiences strong economic growth,
a. the number of families in the bottom 10 percent of the income distribution decreases b. the income of families in the bottom of the income distribution increases c. only the top of the income distribution is affected d. the accompanying inflation cancels out any change in income distribution e. the rich are no better off because taxes rise with income
If the equilibrium price of natural gas is $4 per thousand cubic feet and a price ceiling is imposed at $3 per thousand cubic feet, the result will be:
a. a surplus of natural gas. b. a shortage of natural gas. c. an accumulation of inventories of unsold gas. d. None of these.
Which of the following exemplifies specific performance that a court might order from the party in breach of a contract?
a. A seller ordered to pay back the price of the commodity to the customer having failed to deliver it on-time. b. A popular singer requested to forgo the fee for her performance at a social fund raising program. c. The owner of a polluting factory ordered to convert his private plot into a public garden. d. A movie director ordered to work with an actress he had previously contracted with, instead of one he later found was available for a lower price.