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.


.E

Economics

You might also like to view...

Collective decision making costs _____

a. decrease as we get closer to unanimity b. increase as more people have to agree c. are an impediment to individual action d. are the reason why simple majority rule is always optimal

Economics

The different stages of production of any commodity can be said to possess high volumetric interdependence if the output produced in any one of the stages affects the output produced during the subsequent stages

Indicate whether the statement is true or false

Economics

To find a firm's total revenue at every quantity, all you need to know is

a. the demand curve for its product. b. the demand curve for its product and its total cost. c. its profit-maximizing price and quantity. d. its total profit curve.

Economics

Discouraged workers are not counted as unemployed because they are working

Indicate whether the statement is true or false

Economics