When the U.S. price level rises relative to other nations' price levels, then
A) U.S. exports decrease, U.S. imports increase, and the aggregate demand curve shifts rightward.
B) U.S. exports decrease, U.S. imports increase, and there is a movement upward along the aggregate demand curve.
C) U.S. exports increase and the aggregate demand curve shifts rightward.
D) U.S. exports decrease, U.S. imports increase, and the aggregate demand curve shifts leftward.
E) U.S. firms' profits increase and the aggregate demand curve shifts rightward.
Answer: B) U.S. exports decrease, U.S. imports increase, and there is a movement upward along the aggregate demand curve.
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Environmental harm declines with rising income per person when
A. with rise in income the increase in demand for better environment quality is larger than any adverse effects from rising production scale. B. the adverse effect of any increase in nominal Gross Domestic Product (GDP) dominates any modest improvements from better production techniques. C. the government imposes restrictions on the import of environment-friendly technologies from abroad. D. the consumption of environment-friendly goods decline with an increase in income.
To conduct a general equilibrium analysis of a change in consumer preferences away from beef and toward chicken, you must consider
A. changes in the price of resources allocated to the production of beef and chicken. B. changes in the amount of resources allocated to the production of beef and chicken. C. changes in the equilibrium prices and quantities of beef and chicken. D. all of the above
The quantity theory of money states that
A) inflation increases when the money growth rate increases. B) as the price level increases, the demand for money increases. C) as the interest rate rises, the demand for money decreases. D) changes in the quantity of money are determined by the commercial banks and not the Federal Reserve.
In a competitive market, the demand and supply curves are Q = 12 - P and Q = 5P, respectively. If output is fixed at Q = 11, what is the amount of the resulting deadweight loss?
A) 0 B) 0.6 C) 11.4 D) 15