Assume that the economy is currently in short-run equilibrium, then the U.S. dollar appreciates in the foreign exchange market. Describe the correct sequence of events that happens as the economy adjusts to a new short-run equilibrium
As the dollar appreciates, foreign goods become less expensive, so Americans buy more imported goods. An appreciated dollar means that the foreign currency has depreciated, so American goods become more expensive for foreigners to purchase and U.S. exports decline. When imports rise and exports fall, net exports fall and aggregate demand (AD) decreases. This would push the AD curve leftward, resulting in a decrease in the price level and a decline in Real GDP.
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The Reserve Bank of Glassen is the apex banking institution in the country of Glassen. Money supply in Glassen will increase when:
a. the Reserve Bank of Glassen buys bonds from commercial banks
b. the Reserve Bank of Glassen raises the required reserve ratio for commercial banks.
c. the Reserve Bank of Glassen sells government bonds to commercial banks.
d. the Reserve Bank of Glassen raises the discount rate for commercial banks.
e. the Reserve Bank of Glassen prints new checks.
At a 3.5 percent annual growth rate it would take 20 years for GDP per capita to double.
Answer the following statement true (T) or false (F)
Assume an economy experiences, for a given period, a 1% increase in output and a 5% increase in productivity. Given this information, we know that which of the following occurred for this economy during this period?
A) The unemployment rate increased during this period. B) The unemployment rate decreased during this period. C) The unemployment rate did not change during this period. D) The effects on the unemployment rate are ambiguous. E) none of the above
The quantity of labor supplied by households depends on factors such as the wage rate, prices, wealth, and nonlabor income.
Answer the following statement true (T) or false (F)