Related to the Economics in Practice on p. 560, In 2012, the Indian monsoons came with less rain than normal. this threatened to
A. increase the overall inflation rate in India where the population is very dependent on rice.
B. increase the price of rice in the United States dramatically since Americans consume a large amount of rice.
C. lower the price of rice as consumers sought out other suitable substitutes.
D. cause a major recession throughout all of Asia.
Answer: A
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In the short run, lowering the federal funds rate shifts the aggregate demand curve ________ so that real GDP ________ and the price level ________
A) leftward; decreases; rises B) rightward; increases; rises C) rightward; decreases; rises D) leftward; decreases; falls E) rightward; increases; falls
In the short run,
a. the labor market is always in equilibrium b. actual output can deviate from potential output c. crowding out is always complete d. total output is independent of spending e. spending is independent of total income
Refer to the given diagram and assumptions. We would expect a flow of remittances from migrants to:
(1) The demand for labor in Alphania and Betania are as shown by D A and D B ,
respectively; (2) Alphania's native labor force is F and that of Betania is g; (3) wage L in Alphania is equal to wage m in Betania; and (4) full employment exists in both countries.
A. decrease the national income loss in Betania.
B. increase the national income gain in Betania.
C. decrease the national income loss in Alphania.
D. decrease the national income gains in both countries.
In which situation will inflation fall the fastest?
A. A negative supply shock occurs, the dynamic aggregate demand curve is steep and so is the monetary policy reaction curve B. A negative supply shock occurs, the dynamic aggregate demand curve is flat and so is the monetary policy reaction curve C. A negative supply shock occurs, the dynamic aggregate demand curve is steep, and the monetary policy reaction curve is flat D. A negative supply shock occurs, the dynamic aggregate demand curve is flat, and the monetary policy reaction curve is steep