If the U.S. dollar decreases in value relative to other currencies, how does this affect the aggregate demand curve?
A) This will move the economy up along a stationary aggregate demand curve.
B) This will move the economy down along a stationary aggregate demand curve.
C) This will shift the aggregate demand curve to the left.
D) This will shift the aggregate demand curve to the right.
Answer: D
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What is gained when people engage in specialization and trade?
A) Specialization and trade allow people to consume outside their individual production possibilities frontiers. B) Specialization and trade allow people to consume at a point on their production possibilities frontiers. C) Specialization and trade allow people to produce outside their individual production possibilities frontiers. D) Specialization and trade allow people to consume inside their production possibilities frontiers. E) There are no gains from specialization and trade.
In the labor market, if the government imposes a minimum wage that is below the equilibrium wage, then
A) workers who wish to work at the minimum wage will have a difficult time finding jobs. B) firms will hire fewer workers than without the minimum wage law. C) some workers may lose their jobs as a result. D) nothing will happen to the wage rate or employment.
Which of the following best describes how a perfectly competitive industry would respond to a sudden increase in popularity of the product? The market demand curve would shift to the right, leading to:
A. a higher equilibrium price in the short run and a permanent increase in economic profit. B. a lower short-run equilibrium price due to the entry of firms into the market. C. a higher equilibrium price in the short run and entry into the market in the long run. D. no change in the short-run equilibrium price, and a higher long-run equilibrium quantity.
To determine real GDP, divide nominal GDP by the
a. current values of goods and services. b. final goods and services. c. GDP deflator. d. value of GDP.