How did the Great Depression affect economists' beliefs about the macroeconomy?
What will be an ideal response?
Ans: Instead of assuming that the macroeconomy would automatically recover from a recession, economists began to consider the possibility that modern market economies could fall into prolonged contractions and that government assistance would be necessary to pull them out.
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There has been an increase in the demand for chicken. This change can be shown graphically as a:
A. shift in the demand curve to the right. B. shift in the demand curve to the left. C. movement along the demand curve to the right. D. movement along the demand curve to the left.
The Fed would engage in ____ it wanted to address an inflationary gap
a. expansionary monetary policy b. contractionary monetary policy c. contractionary fiscal policy d. expansionary fiscal policy
A monopolist faces a marginal revenue curve that is below the demand curve, resulting in the production of an allocatively efficient quantity
a. True b. False Indicate whether the statement is true or false
Figure 32-1
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In Figure 32-1, there are four levels of income. G is government expenditures and TT is taxes less transfers. Y3 is the full-employment level of income. At Y3
A. there is an official deficit but a structural budget balance. B. there is a structural deficit but an official budget surplus. C. the official and structural deficit are in balance. D. both the official and structural budgets show a deficit.