Everything else held constant, an appreciation of the domestic currency will cause the IS curve to shift to the ________ and aggregate demand will ________
A) right; increase
B) right; decrease
C) left; increase
D) left; decrease
D
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The extent to which a given change in investment affects aggregate demand depends:
a. on the change in interest rate. b. on the size of the spending multiplier. c. on the change in money supply. d. on the change in investment.
The money supply will increase by a multiple of the increase in bank reserves created by the central bank unless:
A. there is 100 percent reserve banking. B. banks' desired reserve/deposit ratio is 0.20. C. there is fractional reserve banking. D. the public holds no currency.
One way to reduce exports is to
A) base trade on comparative advantage. B) base trade on opportunity costs. C) trade with poor countries. D) restrict imports.
Firms need to address many issues when considering benefits, including: