Exam 9: An Introduction to Basic Macroeconomic Markets

The actions of borrowers and lenders are coordinated by

The price of one country's currency in terms of another's is called

Suppose the annual rate of inflation has been 3 percent during each of the last three years and that borrowers and lenders have come to expect this rate of inflation. If the inflation rate unexpectedly rises,

The money rate of interest will be less than the real rate of interest when decision makers anticipate

If the actual price level is lower than the expected price level reflected in long-term contracts,

A positive level of net exports contributes directly to

Which of the following would generally cause firms to expand output in the short run?

A decrease in the dollar price of foreign currency would cause

If resource prices are fixed and the product selling price rises, then

As the dollar appreciates, which of the following is most likely to occur?

The money interest rate may be a misleading indicator of real borrowing costs when

Resource prices that are fixed by long-term contracts help explain why, in the short run, firms will

Suppose business decision makers become more optimistic about future economic conditions and desire additional funds to expand their plant capacity. What is the likely effect on the loanable funds market?

Use the figure below to answer the following question(s). Figure 9-2 The economy depicted in Figure 9-2 is

Suppose, over the past year, the real interest rate was 3 percent and the inflation rate was 1 percent.

The portion of after-tax income a consumer does not spend on consumption is called

Use the figure below to answer the following question(s). Figure 9-2 Figure 9-2 indicates that the output of the economy, y₁, is

If expected inflation is constant, then when the nominal interest rate increases, the real interest rate

If the price level in the current period is lower than what buyers and sellers anticipated,

Because many resource prices are set by long-term contracts, in the short run