Let us suppose that consumer expectations are optimistic and therefore consumer spending rises. Which of the following effects would likely take place?
An increase in aggregate demand
A decrease in aggregate demand
A decrease in aggregate supply
An increase in aggregate supply
An increase in aggregate demand
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________ in the domestic interest rate causes the demand for domestic assets to ________ and the domestic currency to depreciate, everything else held constant
A) An increase; increase B) An increase; decrease C) A decrease; increase D) A decrease; decrease
If the market price in a competitive market is below the minimum of average variable cost the firm will shut down
Indicate whether the statement is true or false
For interest rates to remain stable during economic contractions, the money supply would have to grow at the same rate as the demand for money
Indicate whether the statement is true or false
The World View "Rebounding Oil Price Spurs More Rigs" related to oil prices and oil rigs suggests.
A. Oil rigs have found new supplies of oil, indicating that the demand for oil is inelastic. B. As the price of oil rises, the quantity supplied falls. C. As the price of oil increases, there is an increase in oil rigs and thus the amount of quantity supplied, indicating that supply is elastic. D. Oil rigs around the world have had difficulty finding additional sources of oil, indicating that the elasticity of supply is inelastic.