Which of the following correctly indicates a potential path for the transmission of expansionary monetary policy to the goods and services market?
a. Higher real interest rates will lead to a decrease in both business investment and consumer purchases of durable items, causing a decrease in aggregate demand.
b. Lower interest rates lead to a depreciation in the foreign exchange value of the dollar, an increase in net exports, and an expansion in aggregate demand.
c. Higher interest rates will tend to increase asset prices, leading to a decrease in wealth that will decrease consumer spending and aggregate demand.
d. A reduction in the general level of prices will increase the disposable income of households and aggregate demand.
B
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Use the following table to answer the question below. Dave's Production Possibilities ScheduleSimon's Production Possibilities SchedulePounds of Green BeansPounds of CornPounds of Green BeansPounds of Corn0160080201204060408080406040120208001600Assume Dave consumes 40 pounds of green beans and 80 pounds of corn without trade. Also, assume that Simon consumes 80 pounds of green beans and 40 pounds of corn without trade. Suppose Simon and Dave specialize and that the terms of trade are 1 pound of green beans for 1 pound of corn. If Simon sells Dave 80 pounds of green beans, then the gains from trade for Simon are ________ pounds of green beans and ________ pounds of corn with trade and specialization.
A. 0, 40 B. 40, 0 C. 20, 20 D. 40, 40
In the U.S. in 2012 the percentage of the Americans living below the poverty line was about
A) 15 percent. B) 20 percent. C) 5 percent. D) 27 percent.
A market has four individuals, each considering buying a grill for his backyard. Assume that grills come in only one size and model. Abe considers himself a grill-master, and finds a grill a necessity, so he is willing to pay $400 for a grill. Butch is a meat-lover, honing his grilling skills, and is willing to pay $350 for a grill. Collin just met the girl of his dreams, and she loves a good grilled steak, so in his effort to impress her he is willing to pay $320 for a grill. Daniel loves grilled shrimp and thinks it might be cheaper in the long run if he buys a grill instead of eating out every time he wants grilled shrimp, so he is willing to pay $200 for a grill.
If the market price of grills is $300, given the scenario described, the total consumer surplus would be: A. $1,070. B. $170. C. $200. D. None of these is true.
In the long run,
a. inputs that were fixed in the short run remain fixed. b. inputs that were fixed in the short run become variable. c. inputs that were variable in the short run become fixed. d. variable inputs are rarely used.