When the prices of a country's imports increase, the prices of domestic goods may increase. This occurs because
A. an increase in the prices of imported inputs will cause aggregate supply to increase.
B. an increase in the prices of imported inputs will cause aggregate demand to decrease.
C. if import prices rise relative to domestic prices, households will tend to substitute domestically produced goods and services for imports.
D. if import prices rise relative to domestic prices, households will tend to substitute imports for domestically produced goods and services.
Answer: C
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Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary
The formula for the CPI is
A) (Cost of CPI market basket at base period prices ÷ Cost of CPI market basket at current period prices) × 100. B) (Cost of CPI market basket at current period prices ÷ Cost of CPI market basket at base period prices) × 100. C) (Cost of CPI market basket this year × Cost of CPI market basket at base period prices) × 100. D) (Cost of CPI market basket this year × Cost of CPI market basket at base period prices) ÷ 100. E) (Cost of CPI market basket at current period prices ÷ Cost of CPI market basket at next year's prices) × 100.
Explain why the average total cost curve and the average variable cost curve get closer to each other as output expands
What will be an ideal response?
Conflicts of interest are a type of ________ problem that can happen when an institution provides multiple services
A) adverse selection B) free-riding C) discounting D) moral hazard