"Although the price levels appear to display short-run stickiness in many countries, a change in the money supply creates immediate demand and cost pressures that eventually lead to future increase in the price level." Discuss
What will be an ideal response?
(See Section 7). The statement is true. The pressures come from three main sources: excess demand for output and labor; inflationary expectations; and, raw material prices.
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If a proportion of traded goods (such as oil) are priced in a foreign currency, the real exchange rate becomes:
a. lower. b. higher. c. less responsive to changes in the nominal exchange rate. d. more responsive to changes in the nominal exchange rate.
The figure above shows the relationship between the time a student spends studying and the student's GPA that semester. The slope of the relationship at point A ________ the slope at point B
A) is greater than B) is less than C) is equal to D) cannot be compared to E) can be compared but more information is needed to determine whether the slope is greater than, less than, or equal to