A decline in U.S. interest rates causes the U.S. dollar to depreciate, making U.S. exports more attractive and imports less attractive. As a result, exports increase, imports decrease, and net exports increase, resulting in an increase in aggregate quantity demanded. This is an example of the _____
a. interest rate effect
b. exchange rate effect
c. wealth effect
d. accelerator effect
b
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Suppose a perfectly competitive increasing-cost industry is in long-run equilibrium when market demand suddenly increases. What happens to the typical firm in the long run?
a. It experiences no change from the original equilibrium b. It experiences a higher average total cost and equilibrium price c. It experiences a lower average total cost and equilibrium price d. It experiences the same equilibrium price but a greater average total cost e. It experiences the same equilibrium price but a lower average total cost
The Council of Economic Advisers
a. was created in 1776 and consists of three members and a staff of several dozen economists. b. was created in 1776 and consists of thirty members and a staff of a dozen economists. c. was created in 1946 and consists of three members and a staff of several dozen economists. d. was created in 1946 and consists of thirty members and a staff of a dozen economists.
Which of the following will cause a decrease in producer surplus?
a. the imposition of a binding price ceiling in the market b. an increase in the number of buyers of the good c. income increases and buyers consider the good to be normal d. the price of a complement decreases
You are given the following information: Reserves (R) in the banking system amount to $48 billion, of which $45.8 billion are required. Currency in the hands of the public amounts to $692.5 billion while checkable deposits amount to $650 billion. Calculate the money multiplier.
What will be an ideal response?