In the open-economy macroeconomic model, as the exchange rate rises,
a. desired net exports fall, so the quantity of dollars supplied rise.
b. desired net exports fall, so the quantity of dollars demanded falls.
c. desired net exports rise ,so the quantity of dollars supplied falls.
d. desired net exports rise, so the quantity of dollars demanded rises.
b
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Which one of the following statements is NOT true?
A) The classical model assumes that people suffer from money illusion. B) The classical model assumes that no single seller of a commodity can affect its price. C) The classical model assumes that pure competition exists. D) The classical model assumes that people are motivated by self-interest.
Suppose a 25% off sale on post-holiday merchandise creates a 50% increase in post-holiday sales. The price elasticity of demand is:
A) 2.0. B) .75. C) .50. D) .25. E) none of the above.
When the U.S. dollar depreciates against the yen, the yen becomes ________ expensive and the U.S. exchange rate ________
A) more; rises B) less; rises C) more; falls D) less; falls
The demand for a good is inelastic. Which of the following would be the most likely explanation for this?
A. The good is narrowly defined. B. The time interval considered is long. C. The good is broadly defined. D. The good costs a large portion of one's total income.