Question : 41.When the U.S. price level increases relative to the price : 1232932

41.When the U.S. price level increases relative to the price level in foreign economies, U.S. consumers tend to buy:   

A. Fewer imported goods and fewer domestically produced goods, ceteris paribus.

B. Fewer imported goods and more domestically produced goods, ceteris paribus.

C. More imported goods and fewer domestically produced goods, ceteris paribus.

D. More imported goods and more domestically produced goods, ceteris paribus.

42.According to the foreign trade effect, when the U.S. price level decreases, U.S. consumers are likely to buy:   

A. More American-made products.

B. Different American-made products.

C. More foreign-made products.

D. Less of all products, both American made and foreign made.

43.Which of the following is an example of the foreign trade effect, assuming the U.S. price level decreases?   

A. The purchasing power of money decreases and people buy fewer goods.

B. U.S. goods are less expensive for Americans so they buy fewer imports and more domestic goods.

C. U.S. production costs stay constant and profits for businesses increase.

D. The demand for loans decreases so interest rates decline and loan-financed purchases increase.

44.Which of the following suggests that lower average prices stimulate more borrowing?   

A. The cost effect

B. The interest rate effect

C. The real balances effect

D. The profit effect

45.The aggregate demand curve is downward-sloping because, other things being equal:   

A. People buy more goods and services at lower average incomes.

B. A lower average price level causes lower interest rates, which stimulate loan-financed purchases.

C. A higher average price level will induce producers to offer more output than otherwise.

D. People buy more goods and services at higher average prices.

46.Which of the following is an example of the interest-rate effect, assuming the U.S. price level decreases?   

A. The purchasing power of money decreases and people buy more goods

B. U.S. goods are more expensive for foreigners to buy and exports decrease

C. U.S. production costs increase and producers charge higher prices

D. The demand for loans decreases so interest rates decline and loan-financed purchases increase

47.The total amount of output producers are willing and able to produce at alternative price levels in a given time period is known as:   

A. Aggregate demand.

B. Aggregate supply.

C. Real GDP.

D. Macro equilibrium.

48.The short-run aggregate supply curve is:   

A. Vertical at all levels of output.

B. Horizontal at all levels of output.

C. Downward sloping to the right.

D. Upward sloping to the right.

49.Ceteris paribus, based on the aggregate supply curve, if the price level _______ the quantity of real output _______ increases.   

A. Increases; produced

B. Decreases; produced

C. Increases; demanded

D. Decreases; demanded

50.The aggregate supply curve is positively sloped because as the price level increases:   

A. Profit margins increase in the short run.

B. Costs of production decline in the short run.

C. The purchasing power of money increases.

D. The cost of borrowing declines.