Other things remaining the same, an increase in the price level
A) decreases the quantity of real GDP supplied.
B) decreases aggregate supply.
C) increases aggregate supply.
D) increases the quantity of real GDP supplied.
E) neither changes aggregate supply nor changes the quantity of real GDP supplied.
D
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A factor that helps to determine the demand for the dollar in the foreign exchange market is
A) the expected future exchange rate. B) the expected future interest rate. C) the amount of U.S. imports. D) the supply of U.S. dollars.
If two competing models are offered to explain a certain economic phenomenon, the better model is the one
A) that is the newest since newer models are better than old models. B) with the fewest unrealistic assumptions. C) that more often predicts with most accuracy. D) that is not subject to empirical verification.
Assume the market is in equilibrium in the graph shown at demand D and supply S1. If the supply curve shifts to S2, and a new equilibrium is reached, which of the following is true?
A. Consumer surplus increases, but producer surplus decreases.
B. Consumer surplus decreases, but producer surplus increases.
C. Both consumer and producer surplus increase.
D. Both consumer and producer surplus decrease.
If the Federal Reserve reduces the federal funds rate,
A. other interest rates, such as home mortgage rates, will rise to compensate. B. long-term interest rates will react more than short-term rates. C. the quantity of funds borrowed and lent will decrease. D. inflation is more likely to occur.