In the early 2000s the European Central Bank warned that higher oil prices were a threat to economic growth. The Bank President called the higher prices "a sizeable adverse shock" to the economy. In terms of the AS/AD framework, this shock would be represented as a shift:
A. right of the AD curve.
B. down (to the right) of the AS curve.
C. up (to the left) of the AS curve.
D. left of the AD curve.
Answer: C
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Spending VCU4 on real-world goods and services causes the nation's:
a. Monetary baseto rise. b. M2 money supply to rise. c. M2 money supply to fall. d. Monetary base to remain the same.
When a group of workers finds that their job skills and work experience have become obsolete and are not needed by industry, this type of unemployment is:
A. structural. B. cyclical. C. search. D. frictional.
When the Fed decreases the discount rate, banks will
a. borrow more from the Fed and lend more to the public. The money supply increases. b. borrow more from the Fed and lend less to the public. The money supply decreases. c. borrow less from the Fed and lend more to the public. The money supply increases. d. borrow less from the Fed and lend less to the public. The money supply decreases.
In 2007, relative to 2001, in the U. S., household
A. revolving debt was higher and household non-revolving debt was lower. B. revolving and non-revolving debt were both higher. C. revolving and non-revolving debt were both lower. D. revolving debt was lower and household non-revolving debt was higher.