Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the long run would be:
A. P1 and Y2.
B. P2 and Y2.
C. P3 and Y1.
D. P2 and Y3.
Answer: D
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If the Japanese yen was 123 per dollar and now it is 114 yen per dollar, it can be said that
A) the yen has appreciated against the dollar. B) the yen has depreciated against the dollar. C) the dollar has appreciated against the yen. D) Both answers C and B are correct
Using the information in Situation 20-2, if taxes increase by $10, then the equilibrium aggregate output will change by
A) -$90. B) -$10. C) $10. D) $90.
If both buyers and sellers expect the price of a commodity to rise in the future, it is likely that the market clearing price ________ and the equilibrium quantity ________
A) will fall, cannot be predicted B) will rise, cannot be predicted C) cannot be predicted, will fall D) cannot be predicted, will rise
If merchandise imports are greater than merchandise exports, the nation is experiencing a
a. negative balance on current account b. merchandise trade deficit c. capital account imbalance d. favorable balance of trade e. growth in foreign reserves