The phase of the business cycle characterized by rising employment is called
a. a recession
b. a low-tax phase
c. a high-inflation phase
d. an expansion
e. a depression
D
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The transmission mechanism is the effect of changes in monetary policy on prices, real GDP, and employment
a. True b. False Indicate whether the statement is true or false
Which of the following adjustments will most likely occur when output exceeds the economy's long-run capacity?
a. Prices will decline, bringing actual output into balance with its potential. b. The natural rate of unemployment will increase and, thereby, restore equilibrium. c. Higher resource prices and costs will reduce short-run aggregate supply until output falls to the economy's long-run capacity. d. Lower interest rates will increase the economy's long-run capacity and restore equilibrium.
If income were distributed equally our economic _________ would suffer.
Fill in the blank(s) with the appropriate word(s).
In this graph, what causes point A to move to point B?
a. a decrease in interest rates in the short run
b. an increase in interest rates in the short run
c. a decrease in interest rates in the long run
d. an increase in interest rates in the long run