A decrease in aggregate supply means:
A. both the real domestic output and rises in the price level would become greater.
B. the real domestic output would increase and rises in the price level would become smaller.
C. the real domestic output would decrease and the price level would rise.
D. both the real domestic output and the price level would decrease.
Answer: C
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If the nominal exchange rate rises and price levels stay constant, the real exchange rate will
A) rise. B) fall. C) stay constant. D) could rise, fall or stay constant.
The old adage "rules are made to be broken" would typically be associated with economists who might advocate ________
A) stabilization policy B) monetary policy C) rule-determined policy D) discretionary policy E) fiscal policy
In 2009, President Obama and Congress stimulated aggregate demand by
A. increasing taxes and government spending. B. decreasing taxes and government spending. C. increasing taxes and decreasing government spending. D. decreasing taxes and increasing government spending.
Other things being equal, the effect of a decrease in the price of DVDs on the market for DVD players is a(n):
A. leftward shift in the demand curve for DVD players. B. upward movement along the demand curve for DVD players. C. rightward shift in the demand curve for DVD players. D. downward movement along the demand curve for DVD players.