Recall the Application about craft beer and the increase in the price of hops to answer the following question(s).Hops are substitutes in the production of beer.
Answer the following statement true (T) or false (F)
False
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Initially the nominal exchange rate between the South Korean won and the U.S. dollar is 950 won per dollar. If the nominal exchange rate increases to 1000 won per dollar and the U.S and Korean price levels do not change, the real exchange rate
A) is the same as before. B) is greater than before. C) is less than before. D) More information is needed to answer the question.
A consequence of increasing marginal costs of producing laptop computers in the United States is
A) the United States will not export laptop computers. B) the United States will stop short of complete specialization in the production of laptop computers. C) the United States will likely impose trade restrictions on imported laptop computers. D) the United States will import laptop computers from countries that don't experience increasing marginal costs.
When banks transform excess reserves into loans, the money supply ultimately increases because borrowers spend the money they borrow, and that money eventually ends up in someone's checking account, an element of the money supply
Indicate whether the statement is true or false
One potential problem with using fiscal policy to close recessionary output gaps is that:
A. sustained government deficits can be harmful to long-run economic growth. B. it may be offset by automatic stabilizers. C. decreased government spending can cause inflationary pressure to build. D. reductions in interest rates can reduce savings and, therefore, investment.