If people expect the economy to do well in the future, they will increase their consumption today at every price level
a. True
b. False
Indicate whether the statement is true or false
True
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How many British pounds would it cost to buy a pair of American designer jeans costing $45 if the exchange rate is 1.50 dollars per British pound?
A) 10 British pounds B) 20 British pounds C) 30 British pounds D) 35 British pounds E) 25 British pounds
Under the theory of purchasing power parity, an increase in the U.S. price level of 10% relative to the Japanese price level will result in
A) a 10% appreciation of the yen. B) a 10% appreciation of the dollar. C) an appreciation of the yen by an amount that depends upon what happens to the real exchange rate. D) an appreciation of the dollar by an amount that depends upon what happens to the real exchange rate.
Veblen goods:
A. are an excellent example of the individual nature of utility. B. are goods which consumers buy to show how wealthy they are. C. are goods that people buy more of when their income decreases. D. are inferior goods.
Refer to the following diagram.
A decline in U.S. housing prices, as in 2007, pushed the AD curve from AD1 to AD2. Dynamic feedback effects that would destabilize the economy could shift:
A. SAS1 to SAS2. B. AD2 to AD1. C. SAS2 to SAS3. D. AD2 to AD3.