The open economy effect refers to the fact that
A) the position and shape of the long run aggregate supply curve is partially due to the fact that we import goods.
B) the slope of the aggregate demand curve is partially explained by the reduction in the desire to buy fewer U.S. goods by U.S. residents and foreign residents as a result of a higher price level.
C) the immigration policies of the United States are disruptive to labor markets.
D) the aggregate supply curve shifts when the economy grows.
B
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If the quantity theory of money holds, then in an economy,
A) inflation = growth rate of money supply - growth rate of real GDP. B) inflation = growth rate of money supply + growth rate of real GDP. C) inflation = growth rate of money supply - growth rate of nominal GDP. D) inflation = growth rate of money supply + growth rate of nominal GDP.
If reserves are __________ because of a temporary __________ in the Treasury's balance at the Fed, open market __________ may be used to offset such influences
A) falling; decline; sales B) rising; increase; sales C) rising; decline; sales D) rising; decline; purchases