A once-and-for-all jump in the price level would initially cause a(n)
a. upward shift in the consumption function.
b. upward movement along the consumption function.
c. downward shift in the consumption function.
d. downward movement along the consumption function.
c
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If the quantity of credit supplied in a market exceeds the quantity of credit demanded in the market:
A) the unemployment rate tends to rise. B) the real rate of interest tends to rise. C) the rate of inflation tends to fall. D) the real rate of interest tends to fall.
When in 1985 a British pound cost approximately $1.30, a Shetland sweater that cost 100 British pounds would have cost $130. With a weaker dollar, the same Shetland sweater would have cost
A) less than $130. B) more than $130. C) $130, since the exchange rate does not affect the prices that American consumers pay for foreign goods. D) $130, since the demand for Shetland sweaters will decrease to prevent an increase in price due to the stronger dollar.