A reduction in the real exchange rate will cause
A) a reduction in net exports.
B) a reduction in the quantity of imports.
C) a reduction in output.
D) an increase in government spending.
E) all of the above
B
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The distribution process performed by the price system is not as efficient as the distribution process of central planners.
Answer the following statement true (T) or false (F)
When a bargaining solution is reached
A) each player receives a net surplus greater than or equal to zero. B) we have a Nash equilibrium. C) the sum of the net surpluses is the Nash product. D) Both A and C.
Rational expectation theory implies that accurately anticipated change in aggregate demand: a. will increase RGDP in the long run
b. will affect RGDP and inflation only in the long run. c. may affect RGDP but not nominal GDP. d. will tend to be offset by the actions of input suppliers as they react to their inflation expectations.
If a price ceiling of $1.50 per gallon is imposed on gasoline, and the market equilibrium price is $2, then the price ceiling is a binding constraint on the market
a. True b. False Indicate whether the statement is true or false