Which of the following is true, other things equal?
A. A reduction in prices will increase the real wealth of those holding a fixed quantity of money.
B. A reduction in prices will lead to a decline in net exports.
C. A reduction in prices will increase the scarcity of money, raise the real interest rate, and, thereby, encourage investment and consumption.
D. A reduction in prices will increase profit margins and, thereby, stimulate additional investment.
Answer: A
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In the above figure, what are the equilibrium price and quantity?
A) $40 and 200 units B) $50 and 100 units C) $10 and 200 units D) $30 and 100 units
A consumer's budget line will shift to the left in a parallel manner if:
a. the price of the good on the X-axis increases. b. the price of the good on the Y-axis increases. c. the consumer's income increases d. the consumer's income decreases.
As a result of the Great Recession, most financial markets hit bottom around
A. September 2008. B. March 2009. C. September 2009. D. March 2010.
In the short run a perfectly competitive firm will
A) never shut down. B) shut down if P < ATC. C) shut down if P < AVC. D) shut down if P > AFC.