In the monetary small open-economy model with a flexible exchange rate, an increase in the foreign price level has which impact on domestic money demand?
A) It increases it.
B) It decreases it.
C) It has no impact.
D) It depends.
A
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An increase in disposable income
A. decreases consumption because it shifts the consumption schedule downward. B. increases consumption because it shifts the consumption schedule upward. C. increases consumption by moving upward along a given consumption schedule. D. decreases consumption by moving downward along a given consumption schedule.
A movement along the demand curve shows a change in demand
Indicate whether the statement is true or false
Given the strict quantity theory of money, if the quantity of money doubled, prices would:
a. fall by half. b. double. c. remain constant. d. increase somewhat but less than double.
According to Keynes, the most important determinant of the level of investment was the ______________.
Fill in the blank(s) with the appropriate word(s).