Which one of the following statements is the most correct?
A) If central banks are not sterilizing and the home country has a balance of payments surplus, any associated increase in the home central bank's foreign asset implies an increased home money supply.
B) If central banks are not sterilizing and the home country has a balance of payments surplus, any associated increase in the home central bank's foreign asset implies a decreased home money supply.
C) If central banks are not sterilizing and the home country has a balance of payments surplus, any associated increase in the home central bank's foreign asset implies an increased home money demand.
D) If central banks are not sterilizing and the home country has a balance of payments surplus, any associated decrease in the home central bank's foreign asset implies an increased home money supply.
E) If central banks are not sterilizing and the home country has a balance of payments shortage, any associated decrease in the home central bank's foreign asset implies an increased home money supply.
A
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A decrease in investment leads to ________ in aggregate demand and ________ in real GDP
A) no change; a decrease B) a decrease; an increase C) an increase; an increase D) a decrease; a decrease E) an increase; a decrease
Assume wages paid by a firm to its workers decrease. What will be the reaction of consumers as the market moves to its new equilibrium?
A) Quantity demanded will decrease. B) Quantity demanded will increase. C) The demand curve will shift to the left. D) There will be no reaction by consumers, since input prices determine supply, not demand.