An increase in aggregate demand in the Classical model causes the price level to
A) rise but output remains constant.
B) fall but output remains constant.
C) rise but output to fall.
D) fall but output to rise.
A
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Exchange rates (for instance, the dollar price of yen) tend to be different worldwide at any point in time because of different tastes for currencies in each country
Indicate whether the statement is true or false
In an English auction
A) the price decreases until someone bids. B) the price increases until nobody else will raise the bid. C) bidders put their bids in a sealed envelope. D) the winning bidder pays the amount bid by the person with the second highest bid.
Figure 3-5
In , if the initial demand for margarine were D1, an increase in the price of butter, which is a substitute for margarine, would tend to cause which of the following changes in the market for margarine?
a.
a shift in the demand curve from D1 to D2
b.
a shift in the demand curve from D2 to D1
c.
a movement along demand curve D1 from a to b
d.
a movement along demand curve D1 from b to a
If borrowers and lenders expect a higher rate of inflation,
A. nominal interest rates should decrease. B. nominal interest rates should remain constant. C. nominal interest rates should increase. D. real interest rates should increase.