Which of the following likely occurs when households and firms become more pessimistic?
a. increased spending
b. increased aggregate demand
c. increased real GDP
d. an increase in the unemployment rate
d
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When the price of pizzle trees increased by 20 percent last year, consumers ended up spending 10 percent more on the purchase of pizzle trees. This shows that the demand for pizzle trees
A) was elastic. B) was inelastic. C) was unit elastic. D) did not obey the law of demand.
Is the monopolist supply decision more complicated than that of competitive supply?
A. Yes, because the monopolist can choose its price, and the perfect competitor cannot. B. No, because they are both price takers. C. No, because the market determines the quantity for the monopolist. D. No, because the market determines the price for both firms.
Assume the government decides to reduce spending in order to reduce the budget deficit, which it financed by borrowing in the real credit market. Where and how should you begin your analysis when analyzing the chain reaction of economic interactions?
a. Start the analysis in the real goods market with aggregate demand shifting to the left. b. Start the analysis in the real goods market with aggregate demand shifting to the right. c. Start the analysis in the real goods market with aggregate supply shifting to the left. d. Start the analysis in the real goods market with aggregate supply shifting to the right. e. Start the analysis in the real credit market with demand for real credit shifting to the left.
A change in the reserve requirement is used infrequently by the Fed because it:
A. is disruptive to the banking system. B. does not influence the money supply. C. does not affect bank reserves. D. does not affect the money multiplier.