Which term describes an especially lengthy and deep recession?
a. peak
b. depression
c. recession
d. trough
b. depression
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In the simple economy where y = C + I, equilibrium output is determined at the level of income where saving equals investment
Indicate whether the statement is true or false
Which of the following would make both the equilibrium real interest rate and the equilibrium quantity of loanable funds decrease?
a. The demand for loanable funds shifts right. b. The demand for loanable funds shifts left. c. The supply of loanable funds shifts right. d. The supply of loanable funds shifts left.
If a hurricane were to wipe out the majority of the eastern seaboard in the United States, it would likely cause a:
A. short-run supply shock. B. long-run supply shock. C. long-run demand shock. D. short-run demand shock.
If one fails to account for implicit costs in decision making, then applying the cost-benefit rule will be flawed because:
A. the costs will be understated. B. the benefits will be overstated. C. the benefits will be understated. D. the costs will be overstated.