If the exchange rate is 12.5 pesos per U.S. dollar, it is also 1/12.5 U.S. dollars per peso
a. True
b. False
Indicate whether the statement is true or false
True
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Which of the following isnot a reason why the aggregate-demand curve slopes downward?
A. the interest-rate effect B. All of these answers are reasons why the aggregate-demand curve slopes downward. C. the wealth effect D. the exchange-rate effect E. the classical dichotomy/monetary neutrality effects
The substitution effect suggests that
A. when prices are higher, you buy less of what you originally wanted and use something else instead. B. when prices are higher, you buy fewer because the marginal utility of a good is diminishing. C. when prices are higher, you buy more. D. when prices are higher, your buying power is less, so you buy less.
According to this Application, lower oil prices should ________ aggregate ________
A) increase; demand B) not change; demand C) decrease; demand D) decrease; supply
The fact of increasing opportunity costs means that a production possibilities frontier will
A) be a straight line. B) reach a maximum and then gradually decrease. C) bow outward. D) shift outward over time.