In the figure above, the shift in the aggregate demand curve from AD1 to AD3 could be the result of
A) a decrease in the real interest rate.
B) a decrease in the buying power of money.
C) an increased expectation of a recession that lowers the expected rate of profit from investment.
D) a decrease in the foreign exchange rate.
E) an increase in the price level.
C
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In the long run, the firm ________ change the number of workers it employs and ________ change the size of its plant.
A) can; can B) can; cannot C) cannot; can D) cannot; cannot E) In order to answer the question, more information is needed about how long the long run is.
Which one of the following expressions is the MOST accurate?
A) CA = EX - IM B) CA = IM - EX C) CA = EX = IM D) CA = EX + IM E) CA - IM = EX
The above figure shows a competitive firm's demand for labor assuming that the firm's output sells for $1 per unit. If the wage is $5 per hour, the firm will hire
A) 10 units of labor per hour. B) 5 units of labor per hour. C) 2.5 units of labor per hour. D) 0 units of labor per hour.
How does the effect of changes in foreign demand compare to the effect of changes in the foreign exchange rate?
a. Changes in foreign demand cause a shift in the aggregate demand curve, whereas changes in the foreign exchange rate cause movement along the curve. b. Changes in foreign demand shift the aggregate demand curve rightward, whereas changes in the foreign exchange rate shift the curve leftward. c. Changes in foreign demand cause movement along the aggregate demand curve, whereas changes in the foreign exchange rate cause curve shifts. d. Changes in foreign demand and changes in the foreign exchange rate can both shift the aggregate demand curve.