Question: Explain why the following statement is True, False, or Uncertain according to economic principles. Justification and explanations matter. Thank you B1. An increase in the
Explain why the following statement is True, False, or Uncertain according to economic principles. Justification and explanations matter. Thank you
B1. An increase in the price of Starbucks coffee will increase the price of Tim Horton's coffee. (Diagram required)
B2. If long-run potential GDP and the NAIRU (or natural rate of unemployment) are unchanged, then an increase in the growth rate in output per worker must be offset by a decrease in the growth rate of labor force. (Hint: decompose GDP)
B3. In an economy subject to random aggregate demand shocks, a fixed exchange rate amplifies the shock, making output more volatile. (Diagram required)
B4. A change in any variable that results in a shift of the aggregate expenditure function also results in a shift of the aggregate demand curve.
B5. In a closed economy, if the government permanently increases its deficit, interest rates will increase and private investment spending will decrease
B6. Suppose the Bank of Canada wants to fix its exchange rate below the equilibrium level, it must sell foreign currency from its reserves for Canadian dollars.
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