Risk aversion:
A. is an aspect of an individual's preferences.
B. is the same for everyone.
C. is an unusual type of preference.
D. All of these statements are true.
Answer: A
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Based on the figure below. Starting from long-run equilibrium at point C, an increase in government spending that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ creating _____gap. 
A. D; an expansionary B. B; no output C. B; expansionary D. A; a recessionary
Which of the following is NOT a component of gross domestic product?
A) purchases by consumers of used goods B) government purchases C) net exports D) purchases by consumers of finished goods
If the nominal interest rate is above its equilibrium value, then
A) the demand curve for money shifts rightward and the interest rate rises. B) the demand curve for money shifts leftward and the interest rate falls. C) people sell financial assets and the interest rate falls. D) the supply curve of money shifts leftward and the interest rate rises. E) people buy financial assets and the interest rate falls.
If transaction costs are high, then it is more likely a firm's demand curve is downward sloping
Indicate whether the statement is true or false