Which of the following best describes the ʺwealth effectʺ?
When the price level falls, the real value of household wealth rises.
When the price level in the U.S. rises relative to the price level of other countries, ________ will rise, ________ will fall, and ________ will fall.
imports; exports; net exports
The impact of Hurricane Katrina on consumers in the economy was to make them very pessimistic about their future incomes. How does this increased pessimism affect the aggregate demand curve?
This will shift the aggregate demand curve to the left.
Last week, six Swedish kronor could purchase one U.S. dollar. This week, it takes eight Swedish kronor to purchase one U.S. dollar. This change in the value of the dollar will ________ exports from the U.S. to Sweden and ________ U.S. aggregate demand.
Suppose the U.S. GDP growth rate is slower relative to other countriesʹ GDP growth rates. This will
shift the U.S. aggregate demand curve to the right.
On the long run aggregate supply curve
an increase in the price level has no effect on the aggregate quantity of GDP supplied.
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