Which of following helps explain the negative slope of the aggregate demand curve?
a. A lower price level increases real wealth, which encourages spending on consumption.
b. A lower price level reduces the interest rate, which encourages spending on investment.
c. A lower price level causes the real exchange rate to depreciate, which encourages spending on net exports.
d. All of the above.
e. None of the above.
c. A lower price level causes the real exchange rate to depreciate, which encourages spending on net exports.
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Starting from long-run equilibrium, a decrease in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. higher; potential D. lower; higher
Assume that autonomous consumption equals $200 and disposable income equals $1000. If total consumption equal $800, then the mpc equals
A) 0.2. B) 0.6. C) 0.8. D) 1.0.
During the financial crisis of 2007-2009,
A) mortgage-backed securities became more liquid. B) information costs of mortgage-backed securities rose. C) information costs of mortgage-backed securities declined. D) the tax treatment of mortgage-backed securities was changed.
How did the pill make it easier for women to participate in the paid labor force?
A. By changing cultural attitudes toward women B. By reducing the rate of marriage and forcing women to work C. By giving women more control over when children were born D. By allowing women a means to have fewer children