When real interest rates in the United States rise relative to real interest rates in Japan, what is the impact on the U.S. price level? Explain your answer using AD-SRAS analysis
Higher real interest rates in the United States attract investors to the United States. This increases the demand for the dollar, causing the dollar to appreciate and the yen to depreciate. An appreciated dollar lowers U.S. net exports, shifting the AD curve leftward, which would decrease the U.S. price level. At the same time the depreciated yen makes Japanese-made inputs cheaper for U.S. producers, so the SRAS curve shifts rightward, which would also make the U.S. price level decrease. The combined result would thus be a decrease in the U.S. price level.
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A) hire low-wage workers. B) manufacture in nations they have difficulty exporting to. C) obtain necessary factor inputs. D) All of the above
Which of the following would cause the labor demand curve to shift to the right?
A) a decrease in demand for the product the labor is used to produce B) an increase in labor productivity C) a decrease in the price of a complimentary resource D) all of the above
Suppose a change in technology increases the marginal product of labor. The result is a(n):
a. downward movement along the demand for labor curve. b. rightward shift in the demand for labor curve. c. leftward shift in the demand for labor curve. d. upward movement along the demand for labor curve.
The greater are the barriers to entry into an industry
A. the more elastic will be the demand curves for existing firms. B. the more likely that existing firms will enjoy large profits in the long run. C. the lower will be short-run profits. D. the lower will be the average cost curves of existing firms.