ECO 372T: Principles of Macroeconomics – Entire Course Solution
ECO 372T: Entire Course
ECO 372T Week 1 Discussion – Gross Domestic Product
Post a total of 3 substantive responses over 2 separate days for full participation. This includes your initial post and 2 replies to other students.
Due Thursday
Respond to the following in a minimum of 175 words:
Discuss the limitations of GDP as a measurement tool. If there are such limitations why do we still use it?
Due Monday
Reply to at least 2 of your classmates. Be constructive and professional in your responses.
ECO 372T Week 2 Discussion – Business Cycle Phases
Post a total of 3 substantive responses over 2 separate days for full participation. This includes your initial post and 2 replies to other students.
Due Thursday
Respond to the following in a minimum of 175 words:
Compare and contrast the phases of the business cycle. Pick one period over the past 100 years and describe one phase’s impact on the US economy
Due Monday
Reply to at least 2 of your classmates. Be constructive and professional in your responses.
ECO 372T Week 3 Discussion – Government Revenue and Expenditures
Post a total of 3 substantive responses over 2 separate days for full participation. This includes your initial post and 2 replies to other students.
Due Thursday
Respond to the following in a minimum of 175 words:
Identify the main sources of revenue for and the largest expenditures made by a federal, state, or local Department/Agency that interests you. For example the Department of Defense provides large contracts to local businesses that employ many local residents, what are the impacts to a local economy. You may also look at the National impacts, State impacts or just local impacts.
Due Monday
Reply to at least 2 of your classmates. Be constructive and professional in your responses.
ECO 372T Week 4 Discussion – Money Supply Effects on Interest Rates
Post a total of 3 substantive responses over 2 separate days for full participation. This includes your initial post and 2 replies to other students.
Due Thursday
Respond to the following in a minimum of 175 words:
Discount Rate versus the Federal Funds Rate Describe the differences between the discount interest rate and the Federal Funds Rate. Who sets these rates? Identify at least one individual who sits on the FOMC that represents your Federal Reserve District. How will the FED FOMC actions affect you personally over the next year, be specific.
Due Monday
Reply to at least 2 of your classmates. Be constructive and professional in your responses.
ECO 372T Week 4 Discussion – Money Supply Effects on Interest Rates
Post a total of 3 substantive responses over 2 separate days for full participation. This includes your initial post and 2 replies to other students.
Due Thursday
Respond to the following in a minimum of 175 words:
Explain what happens to the interest rate if the money supply increases or decreases and the money demand remains unchanged. Explain what happens to the interest rate if the money demand increases or decreases and the money supply remains unchanged.
Due Monday
Reply to at least 2 of your classmates. Be constructive and professional in your responses.
ECO 372T Week 5 Discussion – Fiscal Policy
Post a total of 3 substantive responses over 2 separate days for full participation. This includes your initial post and 2 replies to other students.
Due Monday
Respond to the following in a minimum of 175 words:
Compare and contrast Fiscal policy with Monetary policy. Why, when both are used together do we see more impact on the economy than one used independently of each other? Pick one Fiscal Policy that was used over the last year and one Monetary policy that was used, what have been the results?
Due Monday
Reply to at least 2 of your classmates. Be constructive and professional in your responses.
ECO 372T Week 5 Discussion – Fiscal Policy
Post a total of 3 substantive responses over 2 separate days for full participation. This includes your initial post and 2 replies to other students.
Due Thursday
Respond to the following in a minimum of 175 words:
Compare and contrast expansionary and contractionary fiscal policy.
Due Monday
Reply to at least 2 of your classmates. Be constructive and professional in your responses.
ECO 372 Week 1 Economic Definitions Worksheet
Macroeconomic Terms
Define the following terms in your words.
| Term | Definition | Definition Source |
| Gross Domestic Product (GDP) |
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| Real GDP |
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| Nominal GDP |
|
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| Unemployment rate |
|
|
| Inflation rate |
|
|
| Fiscal Policy |
|
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| Monetary policy |
|
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| Aggregate Demand (AD) Curve |
|
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| Macroeconomics | ||
| Microeconomics | ||
| Circular Flow Model | ||
| Supply Curve | ||
| Demand Curve |
ECO 372 Week 1 Product Selection For Week 2 Individual Assignment
In Week 2, you will be writing a paper based on the following:
You’ve been debating on making a purchase for yourself. This is a product you’ve wanted for a while, but one that requires budgeting because you will be making monthly payments.
Select a product in which the demand for the product is clearly affected by the strength or weakness of the overall economy such as new homes, cars, appliances, smart phones, etc. Make sure this is something of sufficient value to require budgeting and making payments.
Submit your product selection to here as an attachment (Does not need APA Formatting) for approval no later than the end of Week 1. You earn 1 point for submission. Approval or redirection will seen in the response to this 1 point assignment.
ECO 372 Week 2 Product Purchases and the Economy
You’ve been debating on making a purchase for yourself. This is a product you’ve wanted for a while, but one that requires budgeting because you will be making monthly payments.
Select a product in which the demand for the product is clearly affected by the strength or weakness of the overall economy such as new homes, cars, appliances, smart phones, etc.
Write a 1,050- to 1,400-word paper in which you address the following:
- Identify and define two economic indicators that reflect the strength of the economy (e.g. real GDP, unemployment rate, inflation rate, interest rate, housing starts, etc.).
- With these economic indicators in mind, how has the economy affected the demand for and supply of your selected product over the last 2 years?
- What was the impact on the supply of the product and the impact on the demand for the product?
- Explain the impact on the price of the product and your decision on whether or not to buy the product.
- Include responses to the following:
- How might you apply what you learned about supply and demand to your work place or your understanding of the product you are considering purchasing?
- How do the concepts of macroeconomics help you understand the factors that affect shifts in supply and demand on the price of the product?
Cite a minimum of three peer-reviewed sources not including your textbook.
Click the Assignment Files tab to submit your assignment.
ECO 372 Week 3 Fiscal Policy Paper
Select an organization with which the team is familiar.
Write a 1,400- to 1,750-word paper in which you include the following:
- Research federal government spending and taxes over the last 3-5 years (fiscal policy). Has total government spending increased or decreased? Explain. Have income tax rates increased or decreased? Explain.
- Describe the impact of these fiscal policies on the U.S. economy
- Describe the impact of these fiscal policies on your team’s selected organization.
- Have other macroeconomic events impacted the economy and/or your selected organization? If so, explain.
- What are expectations regarding the strength of the economy in the next 2 years?
- Make recommendations for your organization regarding how to best compete in the expected economy.
Include a minimum of 3 peer reviewed sources not including your textbook.
Clickthe Assignment Files tab to submit your assignment.
ECO 372 Week 4 International Economics Paper
Select an organization that both U.S. and international presences.
Write a 1,050- to 1,400-word paper in which you answer address the following:
- What does the president and congress do to stimulate the economy? What does the president and congress do to contract the economy?
- What does the Federal Reserve do to stimulate the economy? What does the Federal Reserve do to contract the economy?
- What motivates policymakers to stimulate the economy or contract the economy?
- Based on your research, what does the Federal Reserve say about its policy goals?
- What does the Federal Reserve say about the strength of the economy?
- How does the strength of other economies outside of the U.S. affect your organization?
- Based on your research, recommend changes in your organization’s competitive strategies or supply chain.
Use a minimum of 3 peer-reviewed sources not including your textbook.
Click the Assignment Files tab to submit your assignment.
ECO 372 Final Exam
1) The Marions purchased a Persian rug worth $5,000 from an Iranian textile mill. Everything else remaining unchanged, this will:
decrease the net imports of the domestic country by $5,000.
decrease the consumption expenditure in the domestic country by $5,000.
reduce the net exports of the domestic country by $5,000.
increase the gross domestic product of the domestic country by $5,000.
2) The table given below shows the total amount of spending in the country of Mesodonia. Mesodonia’s gross domestic product is:
$5,660 million.
$4,560 million.
$4,160 million.
$4,710 million.
3) The circular-flow diagram shows that:
firms receive wages and profits from households in the products market.
households sell the factors of production to firms in the inputs market.
households supply resources to firms in the products market.
firms supply labor and other resources to the government in the factor market.
4) Martha lends $200 to a friend who promises to return it after a year. Instead of lending it to her friend, Martha could have put the money in a bank where she could have earned an interest rate of 2 percent per annum. Martha’s opportunity cost of lending the money is _____.
$204
$200
$2
$4
5) Following the unexpected good performance of Leathex, all its employees were given a one-time bonus. This consequently led to a rightward shift of the demand curve for shoes manufactured by the company and a leftward shift of the demand curve for socks. This shows that shoes are:
normal goods.
complementary goods.
substitutes.
inferior goods.
6) Ephlon Inc., an Italian bike manufacturer, opens a factory in the United States. This is an example of:
the catch-up effect.
the accumulation of human capital.
a foreign portfolio investment.
a foreign direct investment.
7) Which of the following is true according to the circular-flow diagram?
Households receive revenue from the government.
Firms receive income from households.
Firms receive wages, rent, and profit from the government.
Households receive wages, rent, and profit from firms.
8) Scarcity occurs because of:
overutilization of labor.
the limited supply of resources.
limited human needs and wants.
the excess of quantity supplied over quantity demanded.
9) In the long run, a higher saving rate:
does not always lead to a higher growth rate of output because of diminishing returns to capital.
does not lead to a higher level of income because of deterioration in labor productivity.
always leads to a higher growth rate of output because of improvement in the stock of human capital.
always leads to a higher level of productivity because of increasing returns to scale.
10) The buyers and sellers in the country of Perylia use corn as a medium of exchange. This means that:
corn can be used as a store of value but not as a unit of account in Perylia.
Perylia uses fiat money.
Perylia uses commodity money.
corn cannot be used as a store of value or as a unit of account in Perylia.
11) Suppose the net foreign investment in Italy is positive. This implies that:
Italy is experiencing a net capital inflow.
foreigners are buying relatively more Italian assets.
foreign direct investment in Italy is higher than foreign portfolio investment in the country.
Italians are buying more foreign assets than foreigners are buying Italian assets.
12) The exhibit given below shows the short-run aggregate demand and supply curves in an economy, AD1 and AS1, and the long-run aggregate supply curve, LRAS. The economy was initially in equilibrium when there was a decrease in aggregate demand, causing a shift of the aggregate demand curve from AD1 to AD2. Which of the following is true in this case?
The economy will move from point D to point A in the short run and then to point C in the long run.
The economy will move from point B to point A in the short run and then to point C in the long run.
The economy will move from point C to point B in the short run and then eventually to point A.
The economy will move from point D to point C in the long run.
13) A difference between commodity money and fiat money is that:
fiat money cannot be used as a unit of account.
commodity money cannot be used as a unit of account.
commodity money is used in a barter economy.
fiat money does not have any intrinsic value.
14) As more capital is used in the production process, the amount of other inputs being fixed, the production function becomes:
steep because the extra output produced from an additional unit of capital decreases.
flat because the extra output produced from an additional unit of capital decreases.
flat because the extra output produced from an additional unit of capital increases.
steep because the extra output produced from an additional unit of capital increases.
15) Suppose the Fed purchases government bonds through open-market operations. All other things remaining equal, this is likely to:
decrease the price level and make domestic goods less expensive relative to foreign goods.
decrease the price level and increase the real wealth of consumers.
increase the price level and eventually decrease the demand for money as well as goods and services.
increase the price level and eventually decrease the interest rate and investment spending.
16) Jack is an out-of-work sculptor. He has been looking for a job for the last two years. Unable to find any, he has given up his job search. Which of the following is true in this case?
This is an example of frictional unemployment.
He is a discouraged worker and will not be included in the calculation of the unemployment rate.
This is an example of structural unemployment.
He is a part of the unemployed labor force.
17) The country of Merilya exported goods and services worth $1.2 million and imported goods and services worth $2.7 million. The net exports of the country was _____.
$2 million, and it had a trade surplus
−$3.9 million, and it had a trade deficit
$3.9 million, and it had a trade surplus
−$1.5 million, and it had a trade deficit
18) If the price level in an economy is 120 and the equilibrium price level is 100, _____.
the supply of money is likely to exceed the demand for money
the demand for money curve will shift to the left
people will want to hold more money than is supplied by the central bank
the purchasing power of money will increase
19) A recent survey showed the health benefits of cranberry juice for treating heart and other respiratory disorders. The exhibit below shows that the initial demand curve for cranberry juice is D1. Which of the following is likely to be a consequence of the publication of the survey?
The demand curve will shift from D1 to D2.
There will be a movement from point A to point C on D1.
The demand curve will shift from D1 to D3.
There will be a movement from point A to point B on D1.
20) Suppose the central bank of a country undertakes an expansionary monetary policy. Which of the following is most likely to be the effect of such a policy, all other things remaining unchanged?
A decrease in the price level that reduces the amount of money that people want to hold and decreases the interest rate.
A decrease in the price level that reduces the interest rate and lowers the real value of the domestic currency foreign-exchange market.
An increase in the price level that stimulates spending on net exports and increases the demand for money
An increase in the price level that reduces the real value of households’ money holdings and stimulates consumer spending
21) The Phillips curve shows:
the positive relationship between the price level and aggregate supply.
the positive relationship between the interest rate and the supply of money.
the negative relationship between inflation and unemployment.
the negative relationship between the interest rate and the demand for money.
22) A rise in the price of bacon from $14 per pound to $16 per pound will reduce the purchasing power of the dollar by:
5 pounds of bacon.
0.55 pounds of bacons.
2 pounds of bacon.
0.06 pounds of bacon.
23) There is an increase in human capital when _____.
Susie puts in more than 8 hours of work at her workplace every day
Sue rents a laser printer to teach her employees how to fix it
Shiroh persuades the management of her company to offer more perks to employees
Samantha receives training in quality management after joining a new firm
24) Suppose an economy is in long-run equilibrium. An increase in consumption expenditure will:
decrease both the price level and real gross domestic product in the long run.
increase the price level in the long run but have no effect on real gross domestic product.
shift the aggregate demand curve rightward and increase the real output in the long run.
shift the short-run aggregate supply curve rightward and increase both the price level and real output in the long run.
25) After retirement, Molly deposits $500,000 in a local bank in Merrina. At an interest rate of 4 percent, she will receive approximately _____ after 3 years.
$662,345
$608,326
$562,432
$750,000
26) Ruth wants to calculate the present value of a sum of money that she will receive after the demise of her grandparents. To calculate the present value, she should use the:
discounting method.
value-added method.
expenditure method.
compounding method.
27) A higher interest rate in a country:
makes domestic bonds less attractive to foreigners.
lowers saving in the country and decreases the quantity of loanable funds supplied.
discourages investment and decreases the quantity of loanable funds demanded.
encourages citizens to buy foreign assets.
28) Keynesian economists believe that when an economy is in a recession, the government should:
increase its purchases rather than decrease taxes because households save a part of the increase in their income as a result of tax cuts.
increase the money supply in the economy so that interest rates decline, reducing the cost of borrowing to finance new investment projects.
decrease tax rates rather than increase government spending because households always view such tax cuts as permanent and increase their current consumption.
increase the money supply in the economy so that an excess supply of money can induce households to increase their consumption expenditure.
29) The natural rate of unemployment in a country is 4 percent. This implies that:
4 percent of the labor force is unemployed at any given point of time.
the unemployment rate is constant at 4 percent over time.
the country has a 4 percent unemployment rate when the labor market is in equilibrium.
the country has an unemployment rate of 4 percent in the short run.
30) Suppose the net capital outflow from Zenovia is negative. This implies that:
the real interest rate in Zenovia is high.
the citizens of Zenovia are investing more in foreign assets than foreigners are investing in assets in Zenovia.
the real interest rate in foreign countries is higher than in Zenovia.
foreigners are not interested in buying assets in Zenovia.
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ECO 372 Week 5 Final Examination
Complete the Final Examination. You are allowed one attempt to complete the examination, which is timed and must be completed in 3 hours. Results are auto graded and sent to your instructor.
1) There is an increase in human capital when _____.
Samantha receives training in quality management after joining a new firm
Shiroh persuades the management of her company to offer more perks to employees
Sue rents a laser printer to teach her employees how to fix it
Susie puts in more than 8 hours of work at her workplace every day
2) In the long run, a higher saving rate:
does not lead to a higher level of income because of deterioration in labor productivity.
always leads to a higher level of productivity because of increasing returns to scale.
always leads to a higher growth rate of output because of improvement in the stock of human capital.
does not always lead to a higher growth rate of output because of diminishing returns to capital.
3) The Marions purchased a Persian rug worth $5,000 from an Iranian textile mill. Everything else remaining unchanged, this will:
increase the gross domestic product of the domestic country by $5,000.
decrease the consumption expenditure in the domestic country by $5,000.
decrease the net imports of the domestic country by $5,000.
reduce the net exports of the domestic country by $5,000.
4) Suppose the net capital outflow from Zenovia is negative. This implies that:
the citizens of Zenovia are investing more in foreign assets than foreigners are investing in assets in Zenovia.
the real interest rate in foreign countries is higher than in Zenovia.
foreigners are not interested in buying assets in Zenovia.
the real interest rate in Zenovia is high.
5) The exhibit given below shows the short-run aggregate demand and supply curves in an economy, AD1 and AS1, and the long-run aggregate supply curve, LRAS. The economy was initially in equilibrium when there was a decrease in aggregate demand, causing a shift of the aggregate demand curve from AD1 to AD2. Which of the following is true in this case?
The economy will move from point D to point A in the short run and then to point C in the long run.
The economy will move from point B to point A in the short run and then to point C in the long run.
The economy will move from point C to point B in the short run and then eventually to point A.
The economy will move from point D to point C in the long run.
6) If the price level in an economy is 120 and the equilibrium price level is 100, _____.
the supply of money is likely to exceed the demand for money
people will want to hold more money than is supplied by the central bank
the purchasing power of money will increase
the demand for money curve will shift to the left
7) Keynesian economists believe that when an economy is in a recession, the government should:
increase the money supply in the economy so that interest rates decline, reducing the cost of borrowing to finance new investment projects.
decrease tax rates rather than increase government spending because households always view such tax cuts as permanent and increase their current consumption.
increase its purchases rather than decrease taxes because households save a part of the increase in their income as a result of tax cuts.
increase the money supply in the economy so that an excess supply of money can induce households to increase their consumption expenditure.
View answers of; ECO/365T full course.
8) The buyers and sellers in the country of Perylia use corn as a medium of exchange. This means that:
Perylia uses commodity money.
Perylia uses fiat money.
corn cannot be used as a store of value or as a unit of account in Perylia.
corn can be used as a store of value but not as a unit of account in Perylia.
9) After retirement, Molly deposits $500,000 in a local bank in Merrina. At an interest rate of 4 percent, she will receive approximately _____ after 3 years.
$662,345
$750,000
$562,432
$608,326
10) The Phillips curve shows:
the positive relationship between the price level and aggregate supply.
the positive relationship between the interest rate and the supply of money.
the negative relationship between inflation and unemployment.
the negative relationship between the interest rate and the demand for money.
11) A decrease in the tax rates in an economy will cause a:
rightward shift of the aggregate demand curve if the crowding-out effect is larger than the size of the tax multiplier.
leftward shift of the aggregate demand curve if the crowding-out effect is larger than the size of the tax multiplier.
rightward shift of the aggregate demand curve if the crowding-out effect is equal to the size of the tax multiplier.
leftward shift of the aggregate demand curve if the crowding-out effect is smaller than the size of the tax multiplier.
12) Which of the following is true according to the circular-flow diagram?
Households receive wages, rent, and profit from firms.
Firms receive income from households.
Firms receive wages, rent, and profit from the government.
Households receive revenue from the government.
13) In the country of Platonia, firms make the economic decisions of what to produce, how to produce, and for whom to produce. Households decide where to work and how to spend their income. Based on this information, it can be concluded that Platonia has a:
command economy.
mercantile economy.
market economy.
closed economy.
14) Ruth wants to calculate the present value of a sum of money that she will receive after the demise of her grandparents. To calculate the present value, she should use the:
compounding method.
discounting method.
expenditure method.
value-added method.
15) Amelia decides to buy 10 shares each of 5 companies instead of investing in 50 shares of a big company. This is an attempt to:
discount the present value of the income from the stocks.
eliminate firm-specific risk though diversification.
discount the future value of the income from the stocks.
eliminate market risk though diversification.
16) The natural rate of unemployment in a country is 4 percent. This implies that:
4 percent of the labor force is unemployed at any given point of time.
the country has an unemployment rate of 4 percent in the short run.
the unemployment rate is constant at 4 percent over time.
the country has a 4 percent unemployment rate when the labor market is in equilibrium.
17) A recent survey showed the health benefits of cranberry juice for treating heart and other respiratory disorders. The exhibit below shows that the initial demand curve for cranberry juice is D1. Which of the following is likely to be a consequence of the publication of the survey?
There will be a movement from point A to point B on D1.
The demand curve will shift from D1 to D2.
There will be a movement from point A to point C on D1.
The demand curve will shift from D1 to D3.
18) Following the unexpected good performance of Leathex, all its employees were given a one-time bonus. This consequently led to a rightward shift of the demand curve for shoes manufactured by the company and a leftward shift of the demand curve for socks. This shows that shoes are:
substitutes.
complementary goods.
inferior goods.
normal goods.
19) Ephlon Inc., an Italian bike manufacturer, opens a factory in the United States. This is an example of:
the catch-up effect.
a foreign portfolio investment.
the accumulation of human capital.
a foreign direct investment.
20) The circular-flow diagram shows that:
firms supply labor and other resources to the government in the factor market.
firms receive wages and profits from households in the products market.
households sell the factors of production to firms in the inputs market.
households supply resources to firms in the products market.
21) Scarcity occurs because of:
overutilization of labor.
the limited supply of resources.
the excess of quantity supplied over quantity demanded.
limited human needs and wants.
22) Suppose an economy is in long-run equilibrium. An increase in consumption expenditure will:
increase the price level in the long run but have no effect on real gross domestic product.
shift the aggregate demand curve rightward and increase the real output in the long run.
shift the short-run aggregate supply curve rightward and increase both the price level and real output in the long run.
decrease both the price level and real gross domestic product in the long run.
23) If the real exchange rate in the United States is below the equilibrium level, _____.
the quantity of dollars supplied will exceed the quantity of dollars demanded
there will be a shortage of dollars
the value of dollar will fall
the demand for dollars by foreigners will balance the supply of dollars from Americans
24) A difference between commodity money and fiat money is that:
fiat money cannot be used as a unit of account.
commodity money cannot be used as a unit of account.
commodity money is used in a barter economy.
fiat money does not have any intrinsic value.
25) A higher interest rate in a country:
encourages citizens to buy foreign assets.
lowers saving in the country and decreases the quantity of loanable funds supplied.
makes domestic bonds less attractive to foreigners.
discourages investment and decreases the quantity of loanable funds demanded.
26) Martha lends $200 to a friend who promises to return it after a year. Instead of lending it to her friend, Martha could have put the money in a bank where she could have earned an interest rate of 2 percent per annum. Martha’s opportunity cost of lending the money is _____.
$204
$4
$2
$200
27) The table given below shows the total amount of spending in the country of Mesodonia. Mesodonia’s gross domestic product is:
$4,560 million.
$5,660 million.
$4,710 million.
$4,160 million.
28) Jack is an out-of-work sculptor. He has been looking for a job for the last two years. Unable to find any, he has given up his job search. Which of the following is true in this case?
This is an example of frictional unemployment.
He is a discouraged worker and will not be included in the calculation of the unemployment rate.
This is an example of structural unemployment.
He is a part of the unemployed labor force.
29) The country of Merilya exported goods and services worth $1.2 million and imported goods and services worth $2.7 million. The net exports of the country was _____.
$2 million, and it had a trade surplus
−$1.5 million, and it had a trade deficit
$3.9 million, and it had a trade surplus
−$3.9 million, and it had a trade deficit
30) Suppose the net foreign investment in Italy is positive. This implies that:
foreign direct investment in Italy is higher than foreign portfolio investment in the country.
foreigners are buying relatively more Italian assets.
Italians are buying more foreign assets than foreigners are buying Italian assets.
Italy is experiencing a net capital inflow.
31) Suppose the Fed purchases government bonds through open-market operations. All other things remaining equal, this is likely to:
decrease the price level and increase the real wealth of consumers.
decrease the price level and make domestic goods less expensive relative to foreign goods.
increase the price level and eventually decrease the interest rate and investment spending.
increase the price level and eventually decrease the demand for money as well as goods and services.
32) A rise in the price of bacon from $14 per pound to $16 per pound will reduce the purchasing power of the dollar by:
0.55 pounds of bacons.
0.06 pounds of bacon.
5 pounds of bacon.
2 pounds of bacon.
33) Suppose the central bank of a country undertakes an expansionary monetary policy. Which of the following is most likely to be the effect of such a policy, all other things remaining unchanged?
An increase in the price level that reduces the real value of households’ money holdings and stimulates consumer spending
An increase in the price level that stimulates spending on net exports and increases the demand for money
A decrease in the price level that reduces the amount of money that people want to hold and decreases the interest rate.
A decrease in the price level that reduces the interest rate and lowers the real value of the domestic currency foreign-exchange market.
34) As more capital is used in the production process, the amount of other inputs being fixed, the production function becomes:
flat because the extra output produced from an additional unit of capital decreases.
steep because the extra output produced from an additional unit of capital decreases.
steep because the extra output produced from an additional unit of capital increases.
flat because the extra output produced from an additional unit of capital increases.
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