A decline in autonomous planned investment spending causes the equilibrium level of aggregate output to ________ and shifts the ________ curve to the ________, everything else held constant
A) rise; LM; right
B) rise; IS; right
C) fall; IS; left
D) fall; LM; left
C
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In the case of purely flexible exchange rates, a decrease in domestic real income, with constant prices and domestic credit, will lead to
A) an increase in international reserves. B) the depreciation of the domestic currency. C) the appreciation of the domestic currency. D) no change in the value of the domestic currency.
The economist Hernando de Soto extensively studied:
a. the problem of scarcity. b. opportunity costs. c. insecure property rights. d. economic freedom in rich countries. e. the sources of comparative advantage in trade.
Within the Keynesian model, if the output of an economy is less than the full-employment level, then
a. a reduction in government expenditures will direct the economy back to full-employment equilibrium. b. a reduction in wage rates and resource prices will quickly restore full-employment equilibrium. c. a reduction in the real interest rate will soon restore full-employment equilibrium. d. output will tend to remain below full-employment capacity unless aggregate expenditures increase.
The most difficult part of forecasting is
A. the complexity of the economy. B. not enough theoretical models. C. lack of computing power. D. insufficient data on the economy.