How can a country with a fixed nominal exchange rate, such as Greece, experience a lower real exchange rate?
A) by experiencing higher inflation than its partners
B) by experiencing deflation if its partners have low inflation rates
C) by limiting the growth of productivity
D) by increasing wages at a faster rate than inflation
B
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Since being originally set in 1913, bank reserve requirements have
A) not been changed. B) been changed only once. C) been changed on numerous occasions. D) been changed on a daily basis.
If the U.S. dollar becomes weaker in international markets, the net effects will include
A) a decrease in short-run aggregate supply (SRAS) and an increase in aggregate demand. B) an increase in short-run aggregate supply (SRAS) and a decrease in aggregate demand. C) a decrease in both short run aggregate supply (SRAS) and aggregate demand. D) an increase in both short run aggregate supply (SRAS) and aggregate demand.
If the marginal propensity to consume is 0.8 and aggregate expenditures initially decrease by $200 million, then the aggregate demand curve will shift ________ , holding the price level constant
a. inward by $1 billion b. outward by $1 billion c. inward by $200 million d. outward by $200 million
The theory of rational expectations suggests that
A. people make systematic forecast errors. B. people never make forecast errors. C. people are slow to incorporate new information into their forecasts. D. people make intelligent use of available information.