A large increase in oil prices is an example of:
A. inflation inertia.
B. an adverse inflation shock.
C. a favorable inflation shock.
D. excessive aggregate spending.
Answer: B
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How does aggregate demand curve (AD) differ from an individual demand curve (D)?
A) AD is generally vertical while D is usually downward sloping. B) D represents the price-quantity relationship for a single good or service while AD looks at the entire economic system. C) AD is generally a downward sloping curve while D usually slopes upward. D) Look for D in macroeconomic analyses and for AD in microeconomics.
The quantity produced in a monopolistically competitive market is ________ than the quantity produced in a perfectly competitive market, and the price charged in a monopolistically competitive market is ________ than the price charged in a perfectly
competitive market. A) higher; higher B) lower; higher C) higher; lower D) lower; lower
If incomes decrease in the United States, Americans will buy more goods, including foreign goods. This increase in demand for foreign goods will cause an increase in the demand for euros
a. True b. False Indicate whether the statement is true or false
In deciding how much money to hold, individuals
A) must understand the velocity of the money and its role in the economy. B) compare the inflation rate with the market interest rate. C) base their decisions on what others are doing. D) evaluate the relative costs and benefits of holding money versus other assets.