Which of the following is incorrect?
A. As the U.S. price level rises, U.S. goods become relatively more expensive so that U.S.
exports fall and U.S. imports rise.
B. As the price level falls, the demand for money declines, the interest rate declines, and
interest-rate-sensitive spending increases.
C. When the price level increases, real balances increase and businesses and households
find themselves wealthier and therefore increase their spending.
D. Given aggregate demand, an increase in aggregate supply increases real output and,
assuming downward-flexible prices, reduces the price level.
C. When the price level increases, real balances increase and businesses and households
find themselves wealthier and therefore increase their spending.
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Which of the following is an example of an activity that creates an external cost?
i. a smoker emitting second-hand smoke ii. sulfur emitting from a smoke stack iii. throwing garbage on the roadside A) i only B) i and ii C) iii only D) ii and iii E) i, ii, and iii
Unlike colonial America, there are no government restrictions on business activities and practices today
Indicate whether the statement is true or false
Ceteris paribus, an increase in the price of a good will cause the
a. quantity demanded of the good to increase. b. quantity supplied of the good to decrease. c. consumer surplus derived from the good to decrease. d. demand of the good to increase.
A country has a comparative advantage if it can produce a good or service
A. at a higher opportunity cost than can other nations. B. at a lower opportunity cost than can other nations. C. by using less resources than other nations. D. that lies outside its production possibilities curve.