Suppose supply decreases, but there is no change in demand. As the market reaches its new equilibrium:
A. excess supply will lead the price to rise.
B. excess demand will lead the price to rise.
C. excess supply will lead the price to fall.
D. excess demand will lead the price to fall.
Answer: B
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When comparing the autonomous expenditure multiplier in a closed-economy model to the autonomous expenditure multiplier in an open-economy model it can be concluded that
a. the multiplier in the open-economy model will be larger than in the closed-economy model. b. the multiplier in the open-economy model will be smaller than in the closed-economy model. c. both multipliers are the same. d. None of the above.
The Bretton Woods system
a. established a worldwide gold standard b. established a worldwide system of fixed exchange rates c. established a worldwide system of flexible exchange rates d. harmonized tariff systems e. was restricted to industrialized nations
Why do the airlines charge less for passengers who stay over Saturday night and purchase their tickets two weeks in advance?
A change in the price level will cause a shift in the expenditure schedule.
Answer the following statement true (T) or false (F)