Suppose the dollar appreciates in the foreign exchange markets. What is the impact on U.S. Real GDP?
A) It must rise because dollar appreciation shifts the U.S. AD curve leftward.
B) It must fall because dollar appreciation shifts the U.S. SRAS curve rightward.
C) It must remain constant since dollar appreciation does not affect either the U.S. AD curve or the U.S. SRAS curve.
D) It may rise, fall, or remain constant depending on whether the U.S. AD curve shifts leftward by more, less, or an amount equal to the rightward shift of the U.S. SRAS curve.
D
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Suppose early Friday morning the economics club buys 200 donuts at 25 cents each, and plans to sell all of them later in the day on campus for 50 cents each
Only 60 donuts are sold at 50 cents, however, and by early afternoon the club is seen trying to unload the remaining donuts for 10 cents each. What can we conclude? A) The club was clearly engaging in predatory pricing of donuts. B) The club was clearly selling below cost. C) The club clearly misjudged the demand for donuts. D) All of the above are true.
At the point where actual inflation is equal to expected inflation,
A) the short-run Phillips curve intersects the long-run Phillips curve. B) the short-run Phillips curve is the same as the long-run Phillips curve. C) the unemployment rate is zero. D) there is no short-run Phillips curve, as this situation only occurs in the long run.
Minimum efficient scale refers to the lowest level of output at which
A) the firm can earn a profit. B) average cost is minimized. C) the firm will operate. D) the average cost curve is downward sloping.
A market economy allocates resources primarily in accordance with orders from government bureaucrats
a. True b. False Indicate whether the statement is true or false