According to the misperceptions theory, after an unanticipated increase in the money supply has occurred, the SRAS curve must shift ________ to restore general equilibrium; as it does so, the price level ________
A) downward; rises
B) downward; falls
C) upward; rises
D) upward; falls
C
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Refer to Table 9-11. If the actual terms of trade are 1 hat for 1.8 clocks and 150 hats are traded, how many clocks will Denmark gain compared to the "without trade" numbers?
A) 30 B) 100 C) 150 D) 900
If government spending does not change, an increase in the government deficit leads to
A) an increase in current consumption. B) a decrease in current consumption. C) no change in current consumption. D) it depends on the marginal propensity to consume.
Under a system of flexible exchange rates, which of the following would be most likely to cause a nation's currency to appreciate on the foreign exchange market?
a. stable domestic prices while the nation's trading partners are experiencing inflation b. a decrease in domestic interest rates c. an increase in foreign interest rates d. a domestic inflation rate of 10 percent while the nation's trading partners are experiencing stable prices
For which one of the following goods would we need to sum individual demand curves vertically to obtain the total demand curve?
A. Frozen yogurt. B. Bubble gum. C. Microwave popcorn. D. Courts of law.