Ceteris paribus, if average prices in the U.S. economy fall, then the
A. Foreign trade effect will lead to a lower quantity of U.S. output demanded.
B. Cost effect will lead to a higher quantity of U.S. output demanded.
C. Real balances effect will lead to a lower quantity of U.S. output demanded.
D. Interest rate effect will lead to a higher quantity of U.S. output demanded.
Answer: D
You might also like to view...
Why does the profit-maximizing level of production occur at the point where marginal revenue equals marginal cost?
What will be an ideal response?
The gift exchange motive suggests that
A) workers value benefits like health insurance more than job security. B) workers prefer a nice work environment, even if they must accept lower wages. C) workers who feel well treated will work harder and more efficiently. D) workers will shirk if they are paid a low wage.
____ is the act of buying a commodity in one market at a lower price and selling it in another market at a higher price
a. Buying short. b. Discounting. c. Tariffing. d. Arbitrage.
If a country is experiencing chronic deficits on current account, what must ultimately happen to its exchange rate?
a. it must appreciate b. it must depreciate c. the market will shift it from floating to fixed d. the market will shift it from fixed to floating e. it will become equalized, that is, the same rate as in other countries