Purchasing power parity's assumption that the real exchange is constant
A) is correct in nearly all instances.
B) would be correct were it not for the existence of trade barriers.
C) is not reasonable.
D) is correct for trade between the United States and Japan, but incorrect in most other bilateral trading relations.
C
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An increase in the level of U.S. exports ________ the demand for goods and service produced in the United States
A) increases B) does not affect C) decreases D) increases or decreases
Suppose 10 workers jointly own and farm a piece of land. They all consume the farm's output in equal shares. If one worker decides to shirk and cuts her labor effort by 50 percent,
a. her consumption will decrease by 50 percent. b. her consumption will decrease by greater than 50 percent. c. her consumption will decrease by less than 50 percent. d. her consumption will not change.
In the short run, an increase in the money supply will
a. decrease the interest rate, increase real GDP, and decrease the price level b. increase the interest rate, decrease real GDP, and decrease the price level c. result in decreases in the interest rate and real GDP, which are then followed by increases in the interest rate which offset some of the change in real GDP d. result in decreases in the interest rate and increases in real GDP, which are then followed by increases in the interest rate which offset some of the increase in real GDP e. result in an increase in the interest rate and a decrease in real GDP, which are then followed by decreases in the interest rate which offset some of the decrease in real GDP
If the money supply is $20,000, velocity is 3, and Real GDP is 5,000 units of output, then the price level is _____________. If the money supply doubled over a short time period to $40,000, the simple quantity theory of money would predict that _____________________.
A. $12; the price level would double B. $6; Real GDP would double C. $12; the price level would be cut in half D. $6; the price level would double