If there is an unanticipated increase in aggregate demand, which of the following is most likely to occur?
a. a reduction in the price level
b. an increase in the rate of unemployment
c. an increase in employment
d. an expansion in the federal budget deficit
C
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As a result of slow economic growth following the recession of 2007-2009, companies including Intel and Worthington Industries cut production and employment in 2015 as a result of the sluggish growth in the total amount of spending in the economy. The total amount of spending in the economy is known as
A) planned investment spending. B) aggregate expenditure. C) deficit spending. D) equilibrium spending.
According to the law of one price, if the price of Colombian coffee is 100 Colombian pesos per pound and the price of Brazilian coffee is 4 Brazilian reals per pound, then the exchange rate between the Colombian peso and the Brazilian real is
A) 40 pesos per real. B) 100 pesos per real. C) 25 pesos per real. D) 0.4 pesos per real.