When an economy experiences a recession there is
A) a rightward shift of the short-run Phillips curve.
B) a leftward shift of the short-run Phillips curve.
C) no change in the short-run Phillips curve.
D) a downward movement along the short-run Phillips curve.
E) an upward movement along the short-run Phillips curve.
D
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Suppose that the dollar real exchange rate falls by 10% against the euro, 20% against the pound, and 25% against the yen. If the United States trades equally with each country, what is the percentage decline in the real effective exchange rate?
a. 22.5% b. 18.3% c. 15.1% d. 20.3%
In the above figure, if the price of pizza falls, the budget line
A) rotates outward and becomes steeper. B) shifts leftward and its slope does not change. C) shifts rightward and its slope does not change. D) rotates inward and becomes flatter.