Which of the following is not associated with an adverse supply shock?
a. the short-run Phillips curve shifts left
b. unemployment rises
c. the price level rises
d. output falls
a
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The BP curve shifts to the left when:
a. the exchange rate falls. b. interest rates rise. c. income rises. d. imports increase.
If a monopolist is producing at an output rate at which P = ATC, then
A) its economic profit will be zero. B) its economic profit will be positive. C) it is maximizing its profits. D) it is minimizing its losses.
Under a managed float, if U.S. demand for British goods drops, which of the following actions would the Bank of England need to take in order to stop any movement in the dollar-pound exchange rate?
a. Buy British pounds for dollars in order to shift the demand curve for pounds leftward b. Sell British pounds for dollars in order to shift the supply curve for pounds leftward c. Sell British pounds for dollars in order to shift the supply curve for pounds rightward d. Buy British pounds for dollars in order to shift the demand curve for pounds rightward e. Do nothing, since purchasing power parity will correct the situation in the short run.
Which statement makes sense? a. Fixing exchange rates causes currency markets to reach equilibrium quickly. b. Having an absolute advantage in the production of goat cheese means the country will specialize in and produce all of the goat cheese traded
c. Arbitrage opportunities are quickly taken. d. Floating exchange rates reduce uncertainty in the currency markets. e. When the dollar depreciates, U.S. consumers can buy more imported goods.