If an inexpensive alternative to oil were found, the price of oil adjusted for inflation
a. would decline as the alternative would reduce the demand for oil.
b. would decline as the alternative would reduce the supply of oil.
c. would increase as the alternative would increase the demand for oil.
d. would increase as the alternative would increase the supply of oil.
a
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Under the rational expectations hypothesis, if wages adjust rapidly to new information about intended policy actions, monetary policy can have an effect
A) in the long run, but not the short run. B) only in the short run and only if the policy is unanticipated. C) in both the short and the long run. D) only in the long run and only if the policy is fully anticipated.
When a country establishes one rate as the exchange rate, but allows their currency to fluctuate within a certain percentage of that value, it is said to have
A) parity bands. B) dollarized. C) a currency basket. D) a pegged currency.
A decreased demand for U.S. dollars on the foreign exchange market, all else equal, will result in a depreciation of the U.S. dollar
Indicate whether the statement is true or false
You are likely to think that the relative price of your good has risen and you should increase your output if you expected
A) the inflation rate to be 10% and the price of your good rose 7%. B) the inflation rate to be 10% and the price of your good rose 10%. C) the inflation rate to be 10% and the price of your good rose 13%. D) the inflation rate to be 0% and the price of your good fell 10%.