Movements of a currency’s value in terms of the foreign exchange rate will affect the quantity of aggregate _______________ in an economy.
a. demand
b. supply
c. production
d. trade
a. demand
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In the above figure of a monopolistically competitive firm, the area of economic profit is
A) ADB. B) ABC. C) P2AD P4. D) P2FEP5.
An open market sale of T-bonds by the Fed causes the money supply to
a. fall and bond prices to fall. b. rise and bond prices to fall. c. rise and bond prices to rise. d. fall and bond prices to rise.
According to new classical theory, if policy is correctly anticipated, expectations are formed rationally, and wages and prices are fully flexible, then an increase in aggregate demand will change Real GDP, but not the price level
Indicate whether the statement is true or false
Fiat money
A) has no or very little value except as money. B) is rarely used in modern economies. C) functions well only if can be redeemed for gold or other precious metals. D) serves well as a medium of exchange, but not as a store of value.