Suppose an economy has an upward-sloping AS curve and an inflationary gap equal to $10 billion. If AD shifts to the left by $10 billion,
A. The inflationary gap will be eliminated.
B. A recessionary gap will be created.
C. Real output will fall by $10 billion.
D. Real output will fall by less than $10 billion.
Answer: D
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Dumping refers to the practice of one country selling off its surplus goods in other countries
Indicate whether the statement is true or false
The price elasticity of demand is equal to
A) the percentage change in quantity demanded divided by the percentage change in price. B) the change in quantity demanded divided by the change in price. C) the percentage change in price divided by the percentage change in quantity demanded. D) the value of the slope of the demand curve.
Differences in price levels
A) explain well actual exchange rate movements. B) are not capable of explaining well actual exchange rate movements, particularly in the short run. C) have been small for most countries in the post-World War II period. D) only can be explained by the fact that little foreign trade actually takes place.
Which of the following was NOT a reason given for opposing the renewal of the charters of the Banks of the United States?
(a) The Banks of the United States made too many bad loans. (b) The Banks of the United States were unconstitutional. (c) The Banks of the United States hindered the development of private banks. (d) The Banks of the United States were owned, in part, by foreign investors.