A decrease in the price level in an economy is likely to cause a:
a. decrease in the real value of dollar-denominated assets.
b. downward shift of the aggregate expenditure line
c. decrease in the equilibrium level of output demanded.
d. downward movement along the aggregate demand curve.
e. leftward shift of the aggregate demand curve.
d
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The American manufacturers of Pet milk unknowingly introduced their product in French-speaking markets without realizing that the word pet in French means "to break wind." Likewise, the English-speaking representative of a U.S. soft-drink manufacturer naively drew laughs from Mexican customers when she offered free samples of Fresca soda pop, because in Mexican slang the word fresca means "lesbian." These are examples of ________.
Suppose when Nablom's Bakery raised the price of its breads by 10 percent, the quantity demanded fell by 15 percent. What was the effect on sales revenue?
A) Sales revenue increased. B) Sales revenue decreased. C) Sales revenue remained unchanged. D) It cannot be determined without information on prices.
A safety report is released that contends that sport utility vehicles are less prone to roll over during crashes than was previously thought. At the same time, the price of steel (used to produce motor vehicles) decreases. The net effect of these two incidents on the market for sport utility vehicles is a(n): a. indeterminate change in price and an increase in equilibrium quantity. b
indeterminate change in price and a decrease in equilibrium quantity. c. decrease in price and an increase in equilibrium quantity. d. increase in price and an increase in equilibrium quantity.
The Rybczynski theorem suggests that development of a new natural resources in a country
A. may cause the country to export only manufactured products. B. may cause the manufacturing sector of the country to shrink. C. will result in balanced growth. D. will increase output in all sectors of the economy.