The classical model does a good job of explaining the __________ while doing poor a job of explaining the __________
a. short run; long run
b. business cycle; long run
c. short run; business cycle
d. unemployment rate; interest rates
e. long run; short run
E
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The average duration of unemployment
A) decreases during recessions and increases during expansions. B) increases during recessions and decreases during expansions. C) does not vary with the business cycle. D) decreases all the time. E) increases all the time.
When Jack's income increases by $1,000, he spends an additional $850 dollars. This implies that his marginal propensity to consume is 0.85
Indicate whether the statement is true or false
If your local bank buys a few billion dollars worth of government securities, what happens to the economy's money supply?
What will be an ideal response?
What happens to the AD curve, the SRAS curve, and the LRAS curve if the central bank increases the money supply?
What will be an ideal response?