Which of the following would help explain why the aggregate demand curve slopes downward?
a. An unexpectedly low price level raises the real wage, which causes firms to hire fewer workers and produce a smaller quantity of goods and services.
b. A lower price level causes domestic interest rates to rise and the real exchange rate to appreciate, which stimulates spending on net exports.
c. A higher price level increases real wealth, which stimulates spending on consumption.
d. A lower price level reduces the interest rate, which encourages greater spending on investment goods.
d
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In the game in Scenario 13.14,
A) R's dominant strategy is Q = 100; C has none. B) C's dominant strategy is Q = 100; R has none. C) Q = 100 is a dominant strategy for both R and C. D) Q = 100 dominates Q = 150 for both firms. E) the dominant strategy for both players is to choose the same level of output, so long as it is not 150.
Suppose the economy has a recessionary gap. By using an expansionary monetary policy, the Fed can
A) raise real GDP without increasing the price level. B) raise real GDP and the price level. C) raise real GDP and decrease the price level. D) raise the price level alone, but cannot increase real GDP.
According to a recent survey, in 2012, the number of U.S. households that owned equitites was about:
a. 3 % b. 27 % c. 45 % d. 55 %
The more inelastic the demand for a product, the more the actual burden of a tax on the product will:
A. fall on sellers. B. fall on buyers. C. fall equally on both buyers and sellers. D. create a larger deadweight loss (or excess burden).