Which of the following result from a change in the money supply brought about by an open market purchase?
A) lower interest rate, higher exchange rate, decreased demand for investment and net exports
B) higher interest rate, higher exchange rate, increased demand for investment and decreased demand for net exports
C) lower interest rate, lower exchange rate, increased demand for investment and net exports
D) higher interest rate, lower exchange rate, decreased demand for investment and increased
demand for net exports
Ans: C) lower interest rate, lower exchange rate, increased demand for investment and net exports
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The price of domestic goods in terms of foreign goods is referred to as the
A) nominal exchange rate. B) real exchange rate. C) relative inflation rate. D) purchasing power parity rate.
Both the permanent-income and life-cycle hypotheses make the assumption that people prefer a ________ consumption pattern in the long run, and so have a ________ short-run MPC out of sudden changes in income
A) smooth, low B) smooth, high C) jagged, low D) jagged, high
Which of the following would shift the AS curve downward?
a. A decrease in the price level b. A decrease in world oil prices. c. An increase in world oil prices. d. A natural disaster that raises unit costs for all firms. e. A loss of technological capability.
Explain: “Whenever a number which is less than the previous average of a total is added to that total, the average will necessarily fall. Conversely, whenever a number which is greater than the previous average of a total is added to that total, the
average will necessarily rise.” How does this help explain the relationship between the various short-run cost curves? Between the various productivity curves? Please provide the best answer for the statement.