Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD3 the result in the short run would be:
A. P1 and Y2.
B. P2 and Y3.
C. P3 and Y1.
D. P2 and Y2.
Answer: B
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The rate at which nations will exchange goods and services is known as the
A) exchange rate. B) transfer rate. C) terms of exchange. D) terms of trade.
A rise in the exchange rate leads to a decrease in the quantity of dollars demanded
Indicate whether the statement is true or false
The marginal product of labor is the
a. marginal revenue product minus the wage paid to the worker. b. total amount of output divided by the total units of labor. c. increase in the amount of output from an additional unit of labor. d. None of the above is correct.
When trade occurs among nations with similar tastes, technology, products, and costs, monopolistically competitive firms will have an incentive:
a. to lower prices to get new customers and increase market share. b. to raise prices to take advantage of a lucrative situation. c. to cut corners in manufacturing to boost profits. d. to raise quality, so they can charge a higher price than the competition.