Starting from long-run equilibrium, if the velocity of money increases (due to, for example, the invention of automatic teller machines) and no action is taken by the government:
A) prices will rise both in the short run and the long run.
B) output will rise both in the short run and the long run.
C) prices will rise in the short run and output will rise in the long run.
D) output will rise in the short run and prices will rise in the long run.
If the short-run aggregate supply curve is horizontal, then the:
A) classical dichotomy is satisfied.
B) money supply cannot affect prices in the short run.
C) money supply cannot affect output in the short run.
D) money supply is irrelevant in the short run.
If the long-run aggregate supply curve is vertical, then changes in aggregate demand affect:
A) neither prices nor level of output.
B) both prices and level of output.
C) level of output but not prices.
D) prices but not level of output.
A short-run aggregate supply curve shows fixed ______, and a long-run aggregate supply curve shows fixed ______.
A) output; output
B) prices; prices
C) prices; output
D) output; prices
Aggregate supply is the relationship between the quantity of goods and services supplied and the:
A) money supply.
B) unemployment rate.
C) interest rate.
D) price level.
According to the quantity theory of money, if output is higher, ______ real balances are required, and for fixed M this means ______ P.
A) higher; lower
B) lower; higher
C) higher; higher
D) lower; lower
Along an aggregate demand curve, which of the following are held constant?
A) real output and prices
B) nominal output and velocity
C) the money supply and real output
D) the money supply and velocity
If an aggregate demand curve is drawn with real GDP (Y) along the horizontal axis and the price level (P) along the vertical axis, using the quantity theory of money as a theory of aggregate demand, this curve slopes ______ to the right and gets ______ as it moves further to the right.
A) downward; steeper
B) downward; flatter
C) upward; steeper
D) upward; flatter
The aggregate demand curve is the ______ relationship between the quantity of output demanded and the ______.
A) positive; money supply
B) negative; money supply
C) positive; price level
D) negative; price level
A 5-percent reduction in the money supply will, according to most economists, reduce prices 5 percent:
A) in both the short and long runs.
B) in neither the short nor long run.
C) in the short run but lead to unemployment in the long run.
D) in the long run but lead to unemployment in the short run.
Short-run fluctuations in output and employment are called:
A) sectoral shifts.
B) the classical dichotomy
C) business cycles.
D) productivity slowdowns.
Would the establishment of a Free Trade Area of the America’s (FTAA) in 2005 be good for the two most advanced economies in the hemisphere, the United States and Canada? How might the establishment of FTAA impact the strategy on North American firms?
What are the economic and political arguments for regional economic integration? Given these arguments, why don't we see more integration in the world economy?
Compare and contrast these explanations of FDI: internalization theory, Vernon's product life cycle theory, and Knickerbocker's theory of FDI. Which theory do you think offers the best explanation of the historical pattern of FDI? Why?
Whose interests should be the paramount concern of government trade policy - the interests of producers (businesses and their employees) or those of consumers?
What is the core difference between Nominal interest Rate and Effective interest Rate? Examplify with numeric interpretation.?