If the dollar rises in value compared to other currencies, what will happen in the United States?
A. An increase in aggregate demand
B. An increase in aggregate supply
C. A decrease in aggregate supply
D. An increase in the U.S. price level
Answer: B
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According to the theory of purchasing power parity, if the inflation rate in England is greater than the inflation rate in Japan,
A) the law of one price has been violated. B) the nominal value of the pound will appreciate against the yen. C) the nominal value of the yen will appreciate against the pound. D) the nominal value of the pound will appreciate against the yen, but only if the two countries are on the gold standard.
If price elasticity of demand is -0.5,
a. a 1% decrease in quantity demanded leads to a 0.5% decrease in price b. a 1% decrease in price leads to a 0.5% increase in quantity demanded c. a 50% decrease in price leads to a 1% increase in quantity demanded d. a 50% decrease in price leads to a 100% increase in quantity demanded e. demand is elastic
A supply shock causes a shift in:
What will be an ideal response?
The following are national income account data for a hypothetical economy in billions of dollars: government purchases ($940); personal consumption expenditures ($4,920); imports ($170); exports ($133); gross private domestic investment ($640). What is GDP in this economy?
a. $6,633 billion b. $6,463 billion c. $6,500 billion d. $6,537 billion