Under the theory of purchasing power parity, an increase in the U.S. price level of 10% relative to the Japanese price level will result in
A) a 10% appreciation of the yen.
B) a 10% appreciation of the dollar.
C) an appreciation of the yen by an amount that depends upon what happens to the real exchange rate.
D) an appreciation of the dollar by an amount that depends upon what happens to the real exchange rate.
A
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A change in the full-employment quantity of labor ________ the short-run aggregate supply curve and ________ the long-run aggregate supply curve
A) shifts; shifts B) shifts; does not shift C) does not shift; shifts D) does not shift; does not shift
Which of the following characterizes the Fed's ability to prevent recessions?
A) The Fed is incapable of changing aggregate demand through its monetary policy tools. B) The Fed is able to "fine tune" the economy and entirely eliminate recessions. C) The Fed is able to eliminate the business cycle and achieve absolute price stability. D) The Fed is able to keep a recession shorter and milder than it would otherwise be.
After World War II, the U.S. dollar was to become the main, official "reserve currency of the new international order," according to Hughes and Cain (2011)
Indicate whether the statement is true or false
Both Keynesian and monetarist theories emphasize the potential of aggregate demand shifts to alter macro outcomes.
Answer the following statement true (T) or false (F)