Based on the graph showing rational expectations and the AD/AS model, when expansionary policy creates the movement to a point higher up the long-run aggregate supply curve, the result is ______.
a. higher price levels and lower RGDP
b. lower price levels and higher RGDP
c. higher price levels and no change in RGDP
d. higher RGDP and no change in price levels
c. higher price levels and no change in RGDP
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Procter & Gamble Co is a major soap producer. All of the following, except one, would shift its supply curve of liquid soap to left. Which is the exception?
a. an increase in the price of bar soap b. an increase in the price of a key ingredient of liquid soap c. environmental regulations force Procter & Gamble to use a more costly technology to produce liquid soap d. a decrease in the price of liquid soap e. an increase in the wage rate for factory workers who produce liquid soap
The marginal benefit Kyra gets from eating a second sandwich is
a. the total benefit Kyra gets from eating two sandwiches minus the total benefit she gets from eating one sandwich. b. the same as the total benefit she gets from eating two sandwiches. c. less than the marginal cost of eating the second sandwich since she chose to eat the second sandwich. d. the total benefit Kyra gets from eating three sandwiches minus the total benefit she gets from eating two sandwiches.
Assuming sticky prices and given expectations of future exchange rates, what is the short-run effect on the exchange rate of the U.S. dollar (purchasing euros) and on domestic and foreign rates of return if there is a temporary increase in the quantity of U.S. dollars?
a. Rates of return on domestic and foreign assets diverge, as the dollar appreciates. b. Domestic and foreign rates of return both fall, as the dollar depreciates. c. Domestic and foreign rates of return converge, as the dollar depreciation lowers returns for U.S. investors who purchase euro-based assets. d. Rates of return on euro assets fall, causing investors to switch into U.S. assets and, therefore, the U.S. dollar appreciates against the euro.
A U.S. tariff on steel would increase the domestic quantity of steel supplied.
Answer the following statement true (T) or false (F)