Refer to Figure 16.2. For the given Phillips curve, an increase in aggregate demand, ceteris paribus, could cause a
A. Movement from point B to point A.
B. Movement from point A to point B.
C. Rightward shift in the curve.
D. Leftward shift in the curve.
Answer: A
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The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
Goods and services that can be produced by using commonly available resources that could be allocated to a wide variety of alternative tasks have a supply that is
A) elastic. B) inelastic. C) unit elastic. D) perfectly inelastic.
Which of the following is the definition of autonomous consumption spending?
a. The effect of a change in wealth on consumption spending b. The part of consumption spending that is independent of disposable income c. The impact of disposable income on consumption spending d. The part of consumption spending that is independent of wealth e. The horizontal intercept of the consumption function
The default rate actually drops as the amount borrowed increases, that is, default rates are highest among those with the smallest student loan debts.
Answer the following statement true (T) or false (F)