A reduction in government spending causes the equilibrium level of aggregate output to ________ at any given interest rate and shifts the ________ curve to the ________, everything else held constant
A) rise; LM; right
B) fall; IS; left
C) fall; LM; left
D) rise; IS; right
B
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With time, a depreciation in the value of a nation's currency in the foreign market will cause the nation's
a. imports to increase and exports to decline. b. exports to increase and imports to decline. c. imports and exports to decline. d. imports and exports to rise.
If the quantity of a good that buyers are willing to buy rises sharply when the price falls, this illustrates what principle?
A. Ceteris paribus B. Market equilibrium C. The law of supply D. The law of demand
For this question, assume that the economy is operating in a fixed exchange rate regime and that perfect capital mobility exists. Given this information, which of the following will occur?
A) The domestic and foreign interest rates must be equal. B) The central bank cannot use monetary policy to affect domestic output. C) An expansionary fiscal policy will require that the central bank increase the money supply. D) all of the above E) none of the above
Which of the following would cause both the equilibrium price and equilibrium quantity of oysters (assume that oysters are a normal good) to decrease?
A) an increase in consumer income B) an oil spill that sharply reduces oyster output C) a decrease in consumer income D) a technological advancement in the production of oysters