Suppose that the aggregate price level in Country X's economy decreases. Which of the following is true? consumer demand increases. interest rates decrease. O investment decreases. O imports decrease.
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- How does a real appreciation affect the quantities of imports and exports? Select one: O a. Imports rise; exports are unaffected. O b. Imports fall; exports rise. O c. Imports rise; exports rise. O d. Imports rise; exports fall. O e. Imports fall; exports fall.How do an increase in the exchange rate and an increase in expected future income change aggregate demand? Aggregate demand when an increase in the exchange rate occurs. Aggregate demand when an increase in expected future income occurs. O A. increases; increases O B. increases; decreases O C. decreases; increases O D. decreases; decreases The graph shows an aggregate demand curve. Suppose there is an increase in the exchange rate. Draw a new curve to show the effect of this change on aggregate demand. Label the new curve C₁. Now suppose that there is an increase in expected future income. Draw a new curve to show the effect of this change on the original AD curve. Label the new curve C₂- 140- 130- 120- 110- 100- 90- 80+ Price level (GDP deflator, 2007=100) 1.6 AD 1.7 1.8 1.9 Real GDP (trillions of 2007 dollars) 2.0 Q ✔Which of these words do not belong to the group? O a. National income O b. Local culture O c. Price Levels O d. Unemployment rate Clear my choice If interest rates are high in the country, this will result into O a. an increase in aggregate demand O b. a drop in inflation level O c. a decrease on the price level O d. an increase on the price level When the exchange rate for a currency rises and becomes stronger, we say that the currency's value is O a. Depreciating O b. Appreciating O c. Surging O d. Unpredictable
- Countries that engage in international trade experience benefits and problems during the exchange. For a country like Oman whose exports of oil always exceed the amount of imports, what is most likely to happen? O a. Low gross domestic product O b. Net exports will be negative O c. Net exports will be positive O d. Lower aggregate demandIn August 2008, Mexican pesos were trading at$0.10 on the foreign exchange market. By Novem-ber, they were down to $0.07, a decline of 30%. Explain the fall in the price of a peso using supplyanddemandcurves. Inwords, explain the equiva-lent rise in the price of a dollar.Time left 0:5 What is the impact on the labour market due to a decrease in the demand for exports? Select one: O a. labour supply shifts to the left; wage rate increases and level of employment is lower O b. labour demand shifts to the left; wage rate decreases and level of employment decreases O c. labour supply shifts to the right; wage rate decreases and level of employment is higher O d. labour demand shifts to the right; wage rate increases and level of employment increases Next page page
- This graph is for the Canadian economy. Price Level a Select one: O Y₁ Real GDP What could have caused the increase in aggregate demand from AD1 to AD2? AD1 O O AD2 a. A higher Canadian dollar exchange rate. b. A decrease in the number of American tourists in Canada. c. An economic expansion in the United States. d. Less American direct investment in Canada. than those in Canada.Potential GDP is the level of aggregate output Select one: a. that can be sustained in the long run without inflation O b. that can be produced if structural unemployment is zero O c. that can be produced at a zero unemployment rate O d. that can be sustained in the long run, if the capacity utilization is below 100%Last year a country had exports of $100 billion, imports of $70 billion, and purchased $60 billion worth of foreign assets. What was the value of domestic assets purchased by foreigners? a. $40 billion b. $30 billion O c. $10 billion O d. $70 billion
- Consider a non-oil-exporting economy in its long-run equilibrium. Which of the following explains the ultimate long-run effect of a decrease in international oil price on the GDP of this economy? The GDP will ultimately increase. O The GDP will ultimately decrease. The GDP will ultimately be at potential output, in the absence of downward- sticky wages. The effect on GDP will be ambiguous.Which of following help explain the negative slope of the aggregate demand curve? Select one: O a. A lower price level increases real wealth, which encourages spending on consumption. O b. A lower price level reduces the interest rate, which encourages spending on investment. O c. A lower price level causes the real exchange rate to depreciate, which encourages spending on net exports. O d. All of the above. O e. None of the above.Consider the following graph. Suppose the economy is currently at point A. Suppose there is a temporary decrease in the prices of raw materials. (Raw materials are used for production.) The economy will go to point, in short run, and then point in long run. Price level O C; B OB;A OB; C O CA ODA Question 2 LRAS - O vertical straight; increase by 10 percent O upward sloping: decrease by 10 percent O vertical straight; remain unchanged O downward sloping: increase by 10 percent Odownward sloping: decrease by 10 percent SRAS₁ SRAS AD Real GDP (Y) 4 LRAS is a(n) line. If the price level drops by 10 percent, then all else being equal, the long- run quantity of aggregate supply will