If currency speculators decide that the value of the dollar should rise in the future relative to the yen, this will increase the demand for dollars and decrease the supply of dollars
Indicate whether the statement is true or false
TRUE
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Which of the following is TRUE regarding business cycles?
I. Cycles are predictable. II. In each cycle, a peak follows an expansion. III. Potential GDP fluctuates around real GDP. A) I and II B) I and III C) II and III D) II only
When Sam's annual income was only $15,000, he purchased 50 pounds of bananas a year. When his income rose to $18,000, he purchased 55 pounds a year. Therefore
A) for Sam, bananas are an inferior good. B) his income elasticity of demand for bananas is negative. C) his income elasticity and price elasticity of demand for bananas are both greater than one. D) for Sam, bananas are a normal good.
Liquidity increases as we move from the M1 to the M2 definition of the money supply
Indicate whether the statement is true or false
Suppose the economy is initially in long-run equilibrium. For each of the shocks listed below, explain the long-run effects on output and the price level
(a) Labor supply decreases. (b) The government shuts down the Bureau of Economic Analysis. (c) Productivity increases.