If consumers believe that next year a recession will occur (in a closed economy), then the real interest rate ________ and investment ________.
A. falls; increases
B. falls; declines
C. rises; increases
D. rises; declines
Answer: A
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Refer to the figure below.________ inflation will eventually move the economy pictured in the diagram from short-run equilibrium at point ________ to long-run equilibrium at point ________. 
A. Rising; A B. Falling; A; C C. Falling; B: C D. Rising; A; C
The income effect refers to the ways in which a change in the price of a good alters the effective buying power of one's income
a. True b. False Indicate whether the statement is true or false
If the supply of a good is relatively elastic, this means that the quantity supplied of the good is
a. not very sensitive to the price of the good. b. highly sensitive to the price of the good. c. unrelated to the price of the good. d. none of the above.
Per Capita Real GDP
What will be an ideal response?