If the dollar appreciates in value relative to foreign currencies, aggregate demand ________.
A. increases because net exports increase
B. decreases because consumption decreases
C. decreases because net exports decrease
D. increases because consumption increases
Answer: C
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If the price level rises faster than the money wage rate, the real wage rate falls
Indicate whether the statement is true or false
Under a negative income tax program,
a. the government guarantees a minimum level of family income. b. a family must pay income taxes on its welfare check. c. a family receives a stated amount of money from the government plus its members can keep all income earned through work. d. the government reduces the welfare payment by any income earned through work. e. a family's income is lower if its members work.
Within the AD/AS model, if consumers increase their savings and cut back on their spending, the
a. natural rate of unemployment will increase. b. real interest rate will decrease and, thereby, cushion the reduction in consumption spending. c. real interest rate will increase because of the higher rate of saving. d. long-run aggregate supply will decrease to restore equilibrium.
If the efficient-market hypothesis is true, then the idea of:
A. herd instinct doesn't always hold. B. tulip mania doesn't always hold. C. tulip mania holds. D. herd instinct holds.