Assume that the economy begins at full employment. Then something happens that brings on a recession. What could that be?
a. a decline in interest rates
b. an increase in govt spending
c. a decline in corporate tax rates
d. an increase in oil prices
Ans: d. an increase in oil prices
You might also like to view...
Movements of ________ interest rates indicate that, contrary to the early Keynesians' beliefs, monetary policy was ________ during the Great Depression
A) nominal; tight B) nominal; easy C) real; tight D) real; easy
With only two goods, if the income effect is in the same direction as the substitution effect then the good is
a. normal b. inferior but not Giffen c. Giffen d. There is not enough information to answer.
The value of cross-price elasticity of demand between golf balls and golf clubs is
a. negative b. positive c. 0 d. greater than 1 e. less than 1
An expansion occurs when ________, when ________, or when both of these occur.
A. potential output grows slowly; actual output equals potential output B. potential output grows slowly; actual output rises above potential output C. potential output grows rapidly; actual output equals potential output D. potential output grows rapidly; actual output rises above potential output.