"The Florida freeze has destroyed 40% of the orange cro
A) Yes. The freeze would not reduce the supply.
B) Yes. The higher price would not reduce the demand.
C) Yes. It assumes the demand curve for oranges is vertical.
D) Yes. It assumes the demand curve for oranges is upward-sloping.
B
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During the 1970s, U.S. prices generally rose faster than prices in other parts of the world. Which of the following changes would the open economy effect predict took place in response to these price level changes? a. Americans reduced the proportion of foreign goods bought since their foreign prices became relatively lower. b. Americans reduced the amount of investment they undertook because
interest rates increased. c. Americans reduced the amount of goods and services they wanted to purchase for consumption because they felt less wealthy. d. Americans reduced the fraction of purchases they made from domestic producers of goods and services, since foreign prices became relatively lower.
What would happen to aggregate demand if the federal government increased military purchases and state and local governments increased their road building budgets at the same time? a. AD would increase
b. AD would increase, because only federal government purchases affect AD. c. AD would increase only if the change in federal purchases were smaller than the change in state and local purchases. d. AD would decrease only if the change in federal purchases was smaller than the change in state and local purchases.