An expansionary monetary policy results in lower interest rates, which in turn
A) reduces the international price of the dollar and increases net exports.
B) increases the foreign demand for U.S. financial instruments, lowering the international price of the dollar and decreasing net exports.
C) reduces the foreign demand for U.S. financial instruments and reduce net exports.
D) increases foreign demand for U.S. financial instruments, raising the international price of the dollar and reducing net exports.
A
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The minimum wage is set above the equilibrium wage rate. Does the minimum wage create inefficiency?
A) Yes B) No C) Only if the supply of labor is perfectly inelastic D) Only if the supply of labor is perfectly elastic E) Only if employment exceeds the efficient amount
The most significant cost to a central bank of reducing unemployment is the costs
a. incurred by printing and distributing new money. b. of lower output. c. of higher real wages. d. of inflation.
The term equilibrium refers to the point where:
A. quantity supplied equals quantity demanded. B. buyers and sellers "agree" on the quantity of a good they are willing to exchange at all prices. C. the supply curve and demand curve do not intersect. D. every buyer and seller achieves their best possible outcome.
As the level of real GDP increases, the short-run aggregate supply curve:
a. shifts to the right. b. shifts to the left. c. becomes flatter. d. becomes steeper. e. becomes horizontal to the real GDP axis.