In the context of the aggregate-demand curve, when the price level increases, households increase their holdings of money, interest rates increase, and spending on investment goods decreases because of the ________ effect.
a) wealth
b) interest-rate
c) exchange-rate
d) net-export
Ans: b) interest-rate
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In a situation of mutual interdependence and identical products, managers of oligopolistic firms ________ attempt to differentiate their product to earn ________ economic profit.
A) should; positive B) should not; positive C) should; negative D) should; zero
Of the following resources used to supply sidewalk food in New York City, which is the most expensive?
a. capital b. land c. entrepreneurial ability d. labor e. food
Which of the following is not one of the ways in which the United States finances a trade deficit?
A. Selling U.S. products to foreigners B. Selling U.S. land and factories to foreigners C. Selling U.S. stocks and bonds to foreigners D. Selling U.S. assets to foreigners
The buying and selling of foreign currency by the central bank is a trade policy whose objective is:
A. reducing purchases of assets abroad. B. stabilizing the exchange rate against external shocks. C. stabilizing the interest rate against foreign capital outflows. D. promoting long term economic growth.