If the United States' price level is below the world price level, all of the following would be successful in raising the world price (supply) level except:
A. wages in the United States falling.
B. the value of U.S. assets falling.
C. the dollar appreciating.
D. the United States gaining a comparative advantage.
Answer: C
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The short run aggregate production function is subject to ________ if capital stock is increased, holding the total efficiency units of labor as constant
A) increasing returns to scale B) constant returns to scale C) decreasing returns to scale D) the Law of Diminishing Marginal Product
If consumers spend _____ of a change in their disposable income, then a tax increase of $100 would lower consumption by $70
a. 35 percent b. 100 percent c. 80 percent d. 70 percent e. 50 percent
When the Fed sets a money supply target,
a. it expects the economy is heading toward recession b. the demand for money adjusts to the discount rate c. the legal reserve requirement becomes ineffective d. the resulting interest rate is set as well e. the interest rate is determined solely by the position of the demand curve for money
If the Korean steel industry subsidizes the steel that it sells to the United States, the
a. United States should protect its domestic steel industry from this unfair competition. b. harm done to U.S. steel producers from this unfair competition exceeds the gain to U.S. consumers of cheap Korean steel. c. harm done to U.S. steel producers is less than the benefit that accrues to U.S. consumers of steel. d. United States should subsidize the products it sells to Korea.