An expansionary monetary policy lowers the real interest rate, causing the domestic currency to ________, thereby ________ net exports
A) appreciate; raising
B) appreciate; lowering
C) depreciate; raising
D) depreciate; lowering
C
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If you considered steak and lobster to be perfect substitutes for each other, your indifference curves between them would be L-shaped
Indicate whether the statement is true or false
Monetary policy has no effect on the equilibrium interest rate if
A) the inflation rate is zero. B) the economy is in the liquidity trap. C) velocity is constant. D) the economy is at full employment.
The flaw of the Classical model of the business cycle is that it
A) assumes away output fluctuations. B) assumes complete wage rigidity. C) assumes unrealistic fooling of workers. D) requires procyclical wage movements and continuous labor market equilibrium.
Which of the following is true of exchange?
a. The value of a good is determined by the cost of the resources required to produce the good. b. Exchange makes it possible for trading partners to produce more goods through division of labor and adoption of mass production methods. c. Nothing new is created by exchange; if one party to an exchange gains, the other must lose an equal amount. d. Both a and b are true.