If an economy experiences high interest rates and high unemployment, the ISLM framework predicts that ________ policy has been too ________
A) fiscal; expansionary
B) fiscal; contractionary
C) monetary; expansionary
D) monetary; contractionary
D
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Welding has changed dramatically over the last decade with more welding jobs dependent on the use of computers
This change increased the demand for welders with computer skills and decreased the demand for welders who lack these skills and is an example of when technology is a ________ to a high-skilled job and a ________ to a low-skilled job. A) complement; substitute B) complement; complement C) substitute; complement D) substitute; substitute
Refer to Figure 14.1. Other things equal, a decrease in taxes is best represented as a movement from
A) point Y to point Z. B) point Z to point X. C) point Z to point Y. D) point Y to point X.
The main effect of an increase in capital stock is a(n):
a. rightward shift of the long-run aggregate supply curve. b. rightward shift of the aggregate demand curve c. leftward shift of the long-run aggregate supply curve. d. leftward shift of the aggregate demand curve. e. increase in price and output levels.
Answer the following questions:
a. If aggregate expenditures falls by $5 million, and the MPC is 0.80, explain the process that will drive the economy to a new equilibrium level. b. What will be the final result of this initial change?