Suppose the government reduces its budget deficit at the same time that energy prices rise sharply. Which of the following is most likely to happen?
a. The price level will rise, since higher energy prices increase the cost of production
b. Real GDP will fall since both events will tend to cause an economic contraction.
c. The price level will fall because the aggregate demand curve has shifted leftward.
d. Real GDP will rise as less government spending leads to more opportunities for the private sector.
e. Both the price level and real GDP will fall.
b
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The sale of foreign assets by a central bank accompanied by an open market purchase of securities of the same size results in:
A) a reduction in the monetary base B) an increase in the monetary base C) a sterilized intervention D) an unsterilized intervention
For foreigners, the intersection of the demand for US dollars and the supply of US dollar is known as the
a. Inflation rate b. Exchange rate c. Price d. Quantity
At any given airport, the airlines hold long-term leases for passenger loading gates. New gates cannot be added without approval of the airlines. Frequent flier programs are also common in the industry. It is, therefore, more difficult for a new airline to enter a given airport (market). Such factors: (i) are called barriers to entry. (ii) tend to decrease the contestability of the air travel
market. a. i and ii b. i not ii c. ii not i d. neither i nor ii
If M = 9,000 . P = 6, and Y = 1,500, what is velocity?
a. 0.167. b. 1. c. 4. d. 36.