Suppose the U.S. dollar gains strength against the euro (and against other major currencies). This strengthening of the dollar will cause which of the following to occur?
A) The aggregate demand curve will shift to the right and the short-run aggregate supply will shift to the right.
B) The aggregate demand curve will shift to the left and the short-run aggregate supply will shift to the right.
C) The aggregate demand curve will shift to the right and the short-run aggregate supply will shift to the left.
D) the aggregate demand curve will shift to the left and the short-run aggregate supply will shift to the left.
B
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If the First National Bank has a gap equal to a negative $30 million, then a 5 percentage point increase in interest rates will cause profits to
A) increase by $15 million. B) increase by $1.5 million. C) decline by $15 million. D) decline by $1.5 million.
According to behavioral economics, advertising works because it:
A. provides useful information that improves consumers' ability to make decisions. B. exploits the self-serving bias. C. exploits the recognition heuristic. D. quickly communicates price changes that exploit the law of demand.