During a recession
A. exports tend to fall.
B. investment tends to fall.
C. imports tend to rise.
D. consumption tends to rise.
Answer: B
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The total earnings arising from the production of the GDP is known as
a. real GDP. b. national income. c. personal income. d. discretionary income.
When the Fed practices contractionary monetary policy, the interest rate goes:
A. up, and the exchange rate will appreciate as a result. B. up, and the exchange rate will depreciate as a result. C. down, and the exchange rate will appreciate as a result. D. down, and the exchange rate will depreciate as a result.
The existence of union wages, efficiency wages, and the minimum wage
A) raises the real wage rate above the equilibrium wage rate and raises the natural unemployment rate. B) lowers the real wage rate below the equilibrium wage rate and creates a shortage of labor. C) raises the real wage rate above the equilibrium wage rate and creates a shortage of labor. D) raises the real wage rate above the equilibrium wage rate and lowers the natural unemployment rate. E) does not have an impact on the equilibrium wage rate or on the amount of unemployment.
To illustrate the classical argument that "supply creates its own demand," the aggregate supply curve should be drawn:
a. downward-sloping. b. upward-sloping. c. horizontal. d. vertical.