According to the real-balance effect, an increase in the price level will
A. decrease total planned real expenditures because of an increase in interest rates.
B. decrease total planned real expenditures as a result of a decrease in the real value of money balances.
C. leave total planned real expenditures unchanged since the price level of all goods has increased.
D. lead to a corresponding increase in total planned real expenditures since businesses are now earning higher profits.
Answer: B
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If the value of the U.S. dollar changes from 1.4 euros to 1.2 euros, we would expect that the United States would experience a ________ in exports and a ________ in imports
A) rise; rise B) fall; fall C) rise; fall D) fall; rise
In 2002, the largest marital status category of white single parents was "never married."
Indicate whether the statement is true or false
The Scarcity Principle applies to:
A. consumers primarily. B. firms primarily. C. everyone. D. poor people primarily.
An isocost line:
A. represents the combinations of K and L that cost the firm the same amount of money. B. has a convex shape. C. represents the combinations of w and K that cost the firm the same amount of money. D. represents the combinations of r and w that cost the firm the same amount of money.