If the price level falls, the aggregate supply decreases as a result of the aggregate demand curve shifting left.
Answer the following statement true (T) or false (F)
False
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Economists use the phrase “business cycle” when discussing
a. movements in interest rates. b. changes in economic productivity. c. fluctuations in employment. d. fluctuations in total output around the trend.
When the Artistic Headwear Company in Bangor, Maine, protecting itself from inadequate supplies, decides to increase its raw material inventories, this decision is included in
a. saving b. dissaving c. transitory investment d. inventory investment e. autonomous investment
As the price level falls,
a. the exchange rate falls, so net exports fall. b. the exchange rate falls, so net exports rise. c. the exchange rate rises, so net exports fall. d. the exchange rate rises, so net exports rise.
If the velocity of money is constant, then
A) a change in nominal GDP can be caused only by a change in the money supply. B) a change in the money supply can be caused only by a change in the price level. C) a change in the money supply is negatively related to a change in nominal GDP. D) a change in the money supply would result in no change in nominal GDP.