The classical model makes little distinction between the long run and short run because
A) wages and prices adjust so fast that the economy is quickly moving towards the long run.
B) the model has not been fully developed yet.
C) current changes influence the long run, so it is not possible to plan for the future.
D) the classical economists knew that we are always operating in the short run.
A
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The real-balance effect indicates that at higher price levels
A) the real value of money holdings increase, resulting in increased saving. B) the purchasing power of money will increase. C) the real value of money holdings fall, resulting in decreased spending. D) the value of the dollar will increase.
Suppose the U.S. dollar price of the Japanese yen decreases. Given this information, which of the following is correct?
A) The dollar has appreciated. B) The dollar has depreciated. C) The yen has appreciated. D) The yen price of the dollar decreased.