Economic models are most often composed of diagrams and equations
a. True
b. False
Indicate whether the statement is true or false
True
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According to the purchasing power parity theory, in the long run
a. the exchange rate between any two currencies should be equal all over the world b. the value of the dollar should equal the value of the pound which should equal the value of the yen c. inflation rates should equalize around the world d. interest rates should equalize around the world e. the exchange rate between the Canadian dollar and the British pound should reflect differences in price levels between Canada and Britain
Which of the following results in higher inflation and higher unemployment in the short run?
a. a more expansionary monetary policy b. a more contractionary monetary policy c. a decrease in the minimum wage d. an adverse supply shock such as an increase in the price of oil
Considering only the goods and forex markets, as the economy adjusts to lower rates of interest and equilibrium is restored, the level of GDP will:
A) fall. B) rise. C) become unstable. D) decline very gradually.
A year-long drought that destroys most wheat crops for the season would shift the:
A. short-run aggregate supply curve only. B. aggregate demand curve only. C. aggregate demand curve, and the short-run aggregate supply curve would shift in response. D. short-run aggregate supply curve and the long-run aggregate supply curve.