Negative demand shocks have a tendency to ________ real GDP relative to potential GDP and ________ the inflation rate
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease
D
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Unemployment that results from technological changes that renders some people's skills obsolete is called: a. frictional unemployment. b. cyclical unemployment
c. structural unemployment. d. seasonal unemployment.
Relative-price variability is "automatic" when
a. firms change prices only once in a while. b. firms change prices often. c. people increase the frequency of their trips to the bank. d. people decrease the frequency of their trips to the bank.
Which of the following two effects of a decrease in the tax rate on saving would raise savings?
a. the income effect and the substitution effect b. the income effect but not the substitution effect c. the substitution effect but not the income effect d. neither the substitution effect nor the income effect
Beginning in 2008, The Federal Reserve and the U.S. Treasury Department responded to the financial crisis by intervening in financial markets in unprecedented ways. Briefly summarize the 4 key actions of the Fed and Treasury
What will be an ideal response?