There are several reasons why the aggregate demand curve is downward sloping. Which of the following CORRECTLY describes one of these explanations?
A) A rise in the price level raises the purchasing power wealth and increases desired consumption.
B) A rise in the price level raises interest rates and increases investment spending.
C) A fall in the price level, holding foreign prices and the exchange rate constant, increases net exports.
D) A rise in the price level lowers the interest rate and increases investment spending.
C
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Refer to Figure 17-6. Salespeople would be indifferent to the two pay schemes if their monthly sales were
A) less than 20 vacuum cleaners. B) between 20 and 30 vacuum cleaners. C) between 30 and 45 vacuum cleaners. D) more than 45 vacuum cleaners.
Harry's Hotdogs is a small street vendor business owned by Harry Huggins. Harry is trying to get a better understanding of his costs by categorizing them as fixed or variable. Which of the following costs are most likely to be considered fixed costs?
a. the cost of mustard b. the cost of hotdog buns c. wages paid to workers who sell hot dogs d. the cost of bookkeeping services
All else equal, which of the following would increase the unemployment rate? (i) an increase in the number of women who return to work after being stay-at-home mothers (ii) a preference among older men to retire early (iii) an increase in the maximum number of weeks for which someone can receive government unemployment benefits (iv) an increase in the number of previously unemployed women who
stop looking for work and become discouraged workers a. (i) and (ii) only b. (iii) only c. (ii) and (iii) only d. (ii), (iii), and (iv) only
A dining table costs $3,000 in New York and same table costs 5000 euros in Rome. If absolute PPP holds, $1 is equal to
A) 1 euro B) 2 euros C) 5/3= 1.67 euros D) 3/5= 0.6 euros