In an open economy, an increase in foreign output would cause the IS curve to shift ________ and a decrease in the foreign real interest rate would cause the IS curve to shift ________
A) down; down
B) down; up
C) up; down
D) up; up
C
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Nutella and Hazelnuts A key ingredient of Nutella is hazelnuts which are grown mostly around the Black Sea in Turkey. Nutella uses about a quarter of the world crop. Two things have occurred recently. Nutella is becoming more popular worldwide and a frost destroyed much of this season's crop. How do these occurrences affect the market for hazelnuts?
The equation of exchange states that:
a. money supply multiplied by real output equals velocity. b. velocity multiplied by money supply equals the selling price times the quantity of actual output. c. money supply divided by velocity equals nominal GDP. d. money supply divided by velocity equals real GDP.
In a closed economy S = I, so in an open economy:
A. S = I ? NX. B. S = I + NX. C. S + I = NX. D. S + NX = I.
Answer the following statements true (T) or false (F)
1. Higher price levels are associated with lower aggregate expenditure at every level of income. 2. The classical economists held that chronic unemployment was likely. 3. According to the classical economists, demand creates its own supply. 4. Keynes suggested that Say’s Law did not apply to a monetary economy because many individuals hold money as saving instead of spending it. 5. Keynes stated that equilibrium could exist at any level of employment or unemployment.