An economy in which output has decreased and prices have increased would suggest that there has been a:
A. negative demand side shock.
B. negative supply side shock.
C. positive demand side shock.
D. positive supply side shock.
Answer: B
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Which of the following is a NOT a tool the Fed uses to change the money supply?
a. The tax rate b. The reserve ratio c. Open market operations d. The discount ratee
According to this Application, in the year 2075, the portion of GDP devoted to spending on Social Security, Medicare and Medicaid is expected to be
A) significantly less than the share of GDP devoted to these programs today. B) roughly equal to the total amount of GDP today. C) greater than the consumption spending component's share of GDP in 2075. D) larger than total federal spending's share of GDP today.
In the IS-LM model, the expenditure multiplier is [1/(1-b)] when the
A) LM curve is horizontal. B) LM curve is upward-sloping. C) LM curve is vertical. D) IS curve is vertical.
A strategy A is "dominant" for a player X if
A) strategy A contains among its outcomes the highest possible payoff in the game. B) irrespective of any of the possible strategies chosen by the other players, strategy A generates a higher payoff than any other strategy available to player X. C) strategy A is the best response to every strategy of the other player. D) strategy A is the best response to the best strategy of the other player. E) every outcome under strategy A generates positive payoffs.