If not corrected, the financial sector crisis of late 2008 would have tended to
A. increase both Real GDP and the general price level.
B. increase Real GDP and lower the general price level.
C. lower both Real GDP and the general price level.
D. lower Real GDP and increase the general price level.
Answer: C
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Answer the next question based on the following data. All figures are in billions of dollars.Gross investment$18Net exports2Residential fixed investment5Inventory investment3Net investment13Consumption (depreciation) of fixed capital is ________.
A. $5 B. $15 C. $13 D. $16
Assume the firms in a monopolistically competitive market are currently incurring economic losses
Because they are price searchers, existing firms will raise their prices until the losses are eliminated and each firm is once again earning zero economic profit. Indicate whether the statement is true or false
If a 1 percent increase in price causes a 0.5 percent increase in quantity supplied, then supply is
A. unit elastic. B. inelastic. C. elastic. D. infinite.
If investment depends on the interest rate, a decrease in net taxes will cause aggregate output to ________ than if investment doesn'?t depend on the interest rate.
A) increase by more B) increase by less C) decrease by more D) decrease by less