Which of the following is NOT an explanation for the shape of the aggregate demand curve?
A. real balance effect
B. investment effect
C. interest rate effect
D. open economy effect
Answer: B
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In the Modern Keynesian Model the short run aggregate supply curve slopes upward. How could one explain the shape of the upward sloping? short-run aggregate supply curve by only focusing on the capital? input?
A graph illustrating the relationship between the quantity of money demanded and the interest rate would have a slope that is:
a. positive. b. negative. c. horizontal. d. vertical.
When economists talk about a balance of payments "deficit," they refer to:
a. a net balance in the balance of payments that is less than zero. b. a condition in which total credits exceed total debits in the balance of payments. c. a deficit in one of the sub-accounts of the balance of payments. d. a disequilibrium in the foreign exchange market. e. a net loss in the trade of international goods and services.
A rise in price almost always:
a. leads to an increase in the quantity supplied of that good or service. b. leads to a decrease in the quantity supplied of that good or service. c. has no effect on the quantity supplied of that good or service. d. leads to an increase in the quantity demanded of that good or service.