The introduction of the power loom during the Industrial Revolution caused:
A. economic growth.
B. the long-run aggregate supply curve to shift to the right.
C. an increase in the potential output of the economy.
D. All of these are true.
D. All of these are true.
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The relation S + (T - G) = I + NX describing the equilibrium of an economy explicitly demonstrates
A) deficit spending by the government reduces either investment and/or net foreign investment. B) deficit spending reduces private saving (assuming net foreign investment remains unchanged). C) as private saving increases net foreign investment must decrease, exports decline. D) as private saving increases the deficit must decline if investment decreases.
If the dollar appreciates, it can be said that
A. foreigners respect the United States more. B. it increases in value within the United States. C. other currencies depreciate. D. it takes more dollars to buy foreign currencies.
Suppose the price of one euro is fixed at $1.00. A Dutch oil company discovers new oil reserves in the North Sea and offers the oil for sale. What is the result if a flexible exchange rate is allowed?
a. The euro changes in value from $1.00 per euro to an equilibrium price of $1.50 per euro.
b. European goods become more expensive to U.S. residents, moving Q2 to Q1.
c. The euro changes in value from $1.50 per euro to an equilibrium price of $1.00 per euro.
d. U.S. exports become cheaper to Europeans, moving Q2 to Q1.
If the demand for a good is elastic, when the price increases, the
A) demand will decrease. B) quantity demanded will increase. C) quantity demanded will decrease by a smaller percentage than the price increased. D) quantity demanded will decrease by a greater percentage than the price increased.