Suppose a shift in aggregate demand creates an economic contraction. If policymakers can respond with sufficient speed and precision, they can offset the initial shift by shifting aggregate
A. supply left.
B. supply right.
C. demand left.
D. demand right.
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If the stock market booms household spending
A. increases. To offset the effects of this on the price level and real GDP, the Fed would increase the money supply.
B. increases. To offset the effects of this on the price level and real GDP, the Fed would decrease the money supply.
C. decreases. To offset the effects of this on the price level and real GDP, the Fed would increase the money supply.
D. decreases. To offset the effects of this on the price level and real GDP, the Fed would decrease the money supply.
The supply of loanable funds comes from
A. national saving. Demand for loanable funds comes from only domestic investment.
B. national saving. Demand for loanable funds comes from domestic and net foreign investment.
C. only net foreign investment. Demand for loanable funds comes from national saving.
D. domestic investment and net foreign investment. Demand for loanable funds comes from national saving.
If the government increases its expenditures the price level
A. and real GDP both rise.
B. and real GDP both fall.
C. rises and real GDP falls.
D. falls and real GDP rises.
In the open-economy macroeconomic model, which of the following happens in response to an appreciation of the real exchange rate?
A. The quantity of dollars demanded in the foreign-exchange market increases.
B. The quantity of dollars demanded in the foreign-exchange market decreases.
C. The quantity of dollars supplied in the foreign-exchange market increases.
D. The quantity of dollars supplied in the foreign-exchange market decreases.
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