How does a higher average price level impact our demand for foreign goods? How would this...
How does a higher average price level impact our demand for foreign goods? How would this impact our trade balance? How would it impact AD?
Homework Answers
- A higher average price level in the domestic economy will increase the demand for foreign goods because the foreign goods are cheap in relation to the domestic goods.
- A higher average price level in the economy will have an adverse impact on trade balance. If the foreign prices are lower than domestic prices then it would call for more imports(because they are at cheap rates) and less exports (because domestic products have high price and wont be able to compete in international market efficiently. Hence, adverse trade balance.
- A higher average price level would decrease the aggregate demand level (of domestic goods) because price and AD have inverse relation. High price means less AD and vice-versa.
Add Answer to:
How does a higher average price level impact our demand for
foreign goods? How would this...
1. Which of the following properly describes the interest-rate effect? a. A higher price level leads to higher money demand, higher money demand leads to higher interest rates, and a higher interest rate increases the quantity of goods and serv
1. Which of the following properly describes the interest-rate effect? a. A higher price level leads to higher money demand, higher money demand leads to higher interest rates, and a higher interest rate increases the quantity of goods and services demanded.b. A higher price level leads to higher money demand, higher money demand leads to lower interest rates, and a lower interest rate reduces the quantity of goods and services demanded.c. A lower price level leads to lower money demand, lower...
16) Consider a macro model with a constant price level and demand-determined output. A rise in...
16) Consider a macro model with a constant price level and demand-determined output. A rise in the net tax rate ________ the simple multiplier and ________ equilibrium national income. A) lowers; raises B) lowers; lowers C) raises; raises D) lowers; has no effect on E) raises; has no effect on 17) Other things being equal, an exogenous fall in the domestic price level leads to a rise in private-sector wealth. As a result, there is A) a downward shift in...
How does sea level rising hurt our planet . How does it impact south west Florida...
How does sea level rising hurt our planet . How does it impact south west Florida ?
An increase in foreign prices relative to the price level in the
An increase in foreign prices relative to the price level in the U.S. will cause: U.S. net exports to rise. US aggregate demand to fall. U.S.net exports to fallIf you are looking at a graph where a cumulative upward sloping curve plots the relationship between price level and output for suppliers, you are looking at a aggregate demand curve graph. aggregate supply curve graph. microeconomic supply graph.The economy has shifted and the quantity of the real GDP supplied has increased. What has potentially happened to aggregate...
When the price level rises and U.S. goods become relatively more expensive than foreign goods, there...
When the price level rises and U.S. goods become relatively more expensive than foreign goods, there will be a(n) downward movement along the aggregate supply curve. upward movement along the aggregate demand curve. downward movement along the aggregate demand curve. leftward shift of the aggregate demand curve. Orightward shift of the aggregate demand curve.
Economics chart The following graph shows the economy in long-run equilibrium at the price level of...
Economics chart The following graph shows the economy in long-run equilibrium at the price level of 120 and potential output of $300 billion. Suppose several foreign economies experience severe recessions, causing foreign purchases of domestic goods and services to decline sharply. Shift the short-run aggregate supply (AS) curve or the aggregate demand (AD) curve to show the short-run impact of the economic turmoil abroad. Tool tip: Click and drag one or both of the curves. Curves will snap into position, so if...
Question 16 If the price level increases in the United States relative to foreign...
Question 16 (1 point)If the price level increases in the United States relative to foreign countries, then American consumers will purchase more foreign goods and fewer U.S. goods. This statement describes:Question 16 options:the output effect.the shift-of-spending effect.the real-balances effect.the foreign purchases effect.Question 17 (1 point)Refer to the diagram. If the initial aggregate demand and supply curves are AD0 and AS0, the equilibrium price level and level of real domestic output will be:Question 17 options:E and B, respectively.F and A, respectively.G...
What would cause the BOTH the price level to decrease and real GDP to decrease? O...
What would cause the BOTH the price level to decrease and real GDP to decrease? O a shift to the left of the AD curve a shift to the right of the SRAS curve a shift to the left of the SRAS curve a shift to the right of the AD curve Question 6 (2 points) When there is an increase in aggregate demand along a stationary upward sloping short run in the short run. and aggregate supply curve, the...
''A higher price level will increase the demand for money, but expectations of a rise in...
''A higher price level will increase the demand for money, but expectations of a rise in the price level will reduce the demand for money.” Is this statement true or false according to the monetary approach? Why?
"A higher price level will increase the demand for money, but expectations of a rise in...
"A higher price level will increase the demand for money, but expectations of a rise in the price level will reduce the demand for money.” Is this statement true or false according to the monetary approach? Why? with citations and references, please
When the price level rises and U.S. goods become relatively more expensive than foreign goods, there will be a(n) downward movement along the aggregate supply curve. upward movement along the aggregate demand curve. downward movement along the aggregate demand curve. leftward shift of the aggregate demand curve. Orightward shift of the aggregate demand curve.
What would cause the BOTH the price level to decrease and real GDP to decrease? O a shift to the left of the AD curve a shift to the right of the SRAS curve a shift to the left of the SRAS curve a shift to the right of the AD curve Question 6 (2 points) When there is an increase in aggregate demand along a stationary upward sloping short run in the short run. and aggregate supply curve, the...
Most questions answered within 3 hours.
-
1. Identify the Issue(s) presented – ensure
that this is in question format
2. State the...
asked 27 seconds from now -
Determine whether the given procedure results in a binomial
distribution. If not, state the reason why....
asked 11 minutes ago -
You have just received a windfall from an investment you made in
a friend's business. She...
asked 3 minutes ago -
The test statistic for a test of independence follows the X^2
distribution with degrees of freedom...
asked 4 minutes ago -
Question 41
Prolonged exposure to secondhand smoke during childhood is a
risk factor for lung cancer....
asked 15 minutes ago -
The highway department wants to estimate the proportion of
vehicles on Interstate 25 between the hours...
asked 19 minutes ago -
8. According to the lecture on chapter 7 of Religions in the
Modern World, which of...
asked 18 minutes ago -
Say a study determines that the amount of time that college
students on a given campus...
asked 54 minutes ago -
Each PART should be 1–2 paragraphs in length.
PART 1: IDENTIFYING THE CUSTOMER AND PROBLEM
Choose...
asked 41 minutes ago -
A 0.357 g of sample of an unknown oxidant is added to an excess
solution of...
asked 54 minutes ago -
Bond James Bond Corporation has 7 percent coupon bonds that have
9 years left to maturity....
asked 50 minutes ago -
Suppose Rural wage = $2.40 per day, Urban modern wage = $4.50
per day, Urban informal...
asked 51 minutes ago