An expansionary monetary policy is one that
A) stimulates aggregate supply.
B) reduces aggregate supply and aggregate demand.
C) stimulates aggregate demand.
D) reduces aggregate demand while stimulating aggregate supply.
C
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In the short run, a country's exchange rate is determined by:
A. supply and demand. B. monetary policy. C. purchasing power parity. D. the domestic inflation rate.
Diminishing returns to labor implies that eventually the marginal product of labor will become negative.
a. true b. false
The figure above shows the labor market in a region. For a minimum wage to change the wage rate and amount of employment, it must be
A) left to the forces of supply and demand. B) set above $6 an hour. C) set equal to $6 an hour. D) set below $6 an hour. E) set at $12 per hour.
Which of the following is a FALSE statement concerning purchasing power parity?
A) Purchasing power parity states that dollars will tend to exchange for pounds at a rate that maintains a constant purchasing power of a given quantity of a currency. B) Over the long term, a Big Mac in New York will tend to cost the same as a Big Mac in London. C) There should not be significant deviations in the long-run value of purchasing power parity. D) Over the long run, purchasing power parity exerts influence over exchange rates. E) An overvalued dollar buys more in Britain than it does in the United States.