It is very important to distinguish between the short run and the long run when we are discussing
a) the aggregate demand
b) the aggregate expenditures
c) the aggregate supply
d) changes in the price level
e) all of the above
Answer: c) the aggregate supply
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What triggers entry in a competitive market? Describe the process that ends further entry
What will be an ideal response?
Prior to the establishment of the Federal Reserve System (1913), reserve requirements
(a) limited the banks' ability to lend. (b) did not restrict the amount of paper-money issued by banks. (c) freed banks to create as much money as the market could bear without regard for risk and withdrawal rates. (d) forced banks to place deposits in the national bank.
During 2017, the rate of inflation was 2 percent. Daniel sold basketballs that year for $16. If Daniel continued to sell basketballs for the same price in 2018, how did the relative price of basketballs change?
a. –2 percent b. –1 percent c. 2 percent d. 1 percent
What is the impact on the foreign exchange rate?
a. The euro depreciates in value compared to the U.S. dollar.
b. The dollar price of euros increases from $1.50 to $1.90.
c. The euro can buy a greater number of units of dollars than before.
d. The dollar price of euros decreases from $1.50 to $1.00.