During a(n) ________ the demand for money decreases because ________
A) recession; the price level rises
B) recession; real GDP decreases
C) equilibrium; real GDP decreases
D) recession; nominal GDP increases
E) expansion; real GDP decreases
B
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If the euro faces a currency crisis with its value falling from $1.40 per euro to $1.20 per euro, who would benefit the most?
a) An American car manufacturer trying to export cars to Spain. b) Universal Studios Orlando, which wants more European tourists to visit its theme parks. c) The Brown family from Florida who plans to visit Paris next month. d) Jared, an American investor who purchased a 10,000 euro bond last year.
In the short-run, a supply shock will lead to
A) movement of prices and output in the same direction. B) movement of prices and output in opposite directions. C) a sustained inflation. D) a movement in prices, but not output.