In the above figure, if the firm is producing Q2 units at a price P2, it should
A) increase output and decrease price.
B) decrease output and increase price.
C) not change output or price.
D) shut down.
C
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A decrease in government transfer payments
A) increases aggregate demand. B) increases the aggregate quantity demanded. C) decreases the aggregate quantity demanded. D) decreases aggregate demand.
If the real exchange rate rises 4%, domestic inflation is 2%, and foreign inflation is 0%, what is the percent change in the nominal exchange rate?
A) 6% B) 4% C) 2% D) 0%
The existence of the underground economy causes gross domestic product (GDP) statistics to _____
a. understate the true volume of economic activity b. overstate the aggregate price level in the economy c. overstate the standard of living d. overstate the profit of firms e. understate government spending in an economy
Ceteris paribus, with a fixed exchange rate, if Americans decide to buy more Japanese-made television sets, this causes a market ________ of Japanese currency and creates a balance-of-payments ________ for the United States.
A. shortage; deficit B. surplus; surplus C. surplus; deficit D. shortage; surplus