When the price level is below the level at which the aggregate demand curve crosses the long run aggregate supply curve
A) total planned real expenditure will be lower than actual real GDP, and the price level will increase.
B) there will be no price level change.
C) there will be pressures that will lead to a shift of either the aggregate demand or the long run aggregate supply curves.
D) total planned real expenditures will exceed actual real GDP, and the price level will increase.
Answer: D) total planned real expenditures will exceed actual real GDP, and the price level will increase.
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Using the UIP equation, what would happen to the spot rate for euros if the interest rate on euro deposits rises ceteris paribus?
a. The spot rate to purchase euros would rise (dollar depreciation). b. The spot rate to purchase euros would fall (dollar appreciation). c. The spot rate to purchase euros would be unchanged. d. The U.S. Federal Reserve would have to raise U.S. short-term interest rates
If a good is capital intensive it means that the good is produced
A) using relatively more capital than goods that are not labor intensive. B) using capital as the only input. C) using more capital per unit of output than goods that are not capital intensive. D) using capital such that the total cost of capital is greater than the total cost of labor. E) using capital such that the cost of capital is more than 50% of total cost.