Monetarists believe that real output is determined by
A. aggregate supply.
B. government planning.
C. the rate of growth of the money supply.
D. government spending.
Answer: A
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Tight monetary policy raises the real interest rate, which ________ the demand for dollars, ________ the supply of dollars, and ________ the equilibrium value of the dollar.
A. decreases; decreases; decreases B. increases; increases; increases C. decreases; increases; increases D. increases; decreases; increases
Competitive firms earn zero profit in the long run when
A) entry is completely free. B) entry is limited. C) Both A and B. D) Neither A nor B.
If a perfectly competitive industry uses a large proportion of the available inputs in a resource market, then the long-run market supply curve for the industry will most likely be: a. vertical
b. horizontal. c. upward sloping. d. downward sloping.
The demand for dollars in the foreign exchange market will decrease and hence the demand curve for dollars will shift leftward if
A) the U.S. interest rate differential decreases. B) the expected future exchange rate rises. C) the exchange rate for the dollar rises. D) the U.S. interest rate differential increases.