Refer to the table. The real-balances effect of changes in the price level is:
Answer the question on the basis of the following table for a particular country in which C is
consumption expenditures, I g is gross investment expenditures, G is government expenditures,
X is exports, and M is imports. All figures are in billions of dollars. Each question is
independent of other question using the same table, unless otherwise stated.
A. shown by columns (1) and (2) of the table.
B. shown by columns (1) and (5) of the table.
C. shown by columns (1) and (4) of the table.
D. not shown by the data in the table.
A. shown by columns (1) and (2) of the table.
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If the Fed's policies aim to increase aggregate demand, the Fed must fear
A) recession. B) a supply shock that increases aggregate supply. C) a supply shock that decreases potential GDP. D) stagflation. E) inflation.
If a bank's net worth is negative, then the bank definitely is
A) liquid. B) insolvent. C) illiquid. D) solvent.