If a country's currency depreciates, which of the following will most likely happen?
a. Net exports will fall and aggregate demand will increase.
b. Net exports will rise and aggregate demand will increase.
c. Net exports will fall and aggregate demand will decrease.
d. Net exports will rise and aggregate demand will decrease.
B
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If the price level is fixed, then an increase in government spending will lead to
A) a larger increase in nominal GDP than in real GDP. B) a smaller increase in nominal GDP than in real GDP. C) no increase in either nominal GDP or real GDP. D) an increase in nominal GDP by the same amount as an increase in real GDP.
If autonomous consumption rises by $60 and, as a result, Real GDP rises by $240, then the marginal propensity to consume is
A) 0.25. B) 0.75. C) 0.05. D) 0.95. E) none of the above
The fundamental reason why most supply curves are upward sloping is that
A) consumers substitute lower-priced goods for higher-priced goods. B) the quantity supplied increases as more firms enter the market. C) a higher price never reduces quantity supplied by enough to lower total revenue and so higher production is motivated. D) higher production raises the opportunity costs of production and so price must rise to induce more output.
If the government limits the number of firms in a market by issuing a limited number of licenses, the market structure is most likely to be:
A. a perfectly competitive market. B. a monopoly. C. a monopolistically competitive market. D. an oligopoly.