Which of the following is incorrect?
A. As the U.S. price level rises, U.S. goods become relatively more expensive so that U.S.
exports fall and U.S. imports rise.
B. As the price level falls, the demand for money declines, the interest rate declines, and
interest-rate-sensitive spending increases.
C. When the price level increases, real balances increase and businesses and households
find themselves wealthier and therefore increase their spending.
D. Given aggregate demand, an increase in aggregate supply increases real output and,
assuming downward-flexible prices, reduces the price level.
C. When the price level increases, real balances increase and businesses and households
find themselves wealthier and therefore increase their spending.
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If a business is run as a sole proprietorship,
a. it is not allowed to borrow money b. the financial liability of the owner is limited to the amount invested in the business c. all of the profits earned in the business flow to the proprietor d. at least two persons are involved in all management decisions e. it cannot hire nonfamily members to work in the business
If a country imposes a tariff on some good, then which of the following curves shifts right?
a. both the demand for loanable funds and demand in the market for foreign-currency exchange. b. the demand for loanable funds and demand in the market for foreign-currency exchange. c. demand in the market for foreign-currency exchange but not the demand for loanable funds. d. neither the demand for loanable funds nor demand in the market for foreign-currency exchange.