Within the AD/AS model, if an unanticipated reduction in aggregate demand results in less than the full-employment rate of output,
a. the natural rate of unemployment will increase.
b. long-run aggregate supply will increase.
c. lower resource prices and declining interest rates will direct the economy back to full employment.
d. higher resource prices and rising interest rates will direct the economy back to full employment.
C
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Consumers often base their spending on their estimated permanent income
Indicate whether the statement is true or false
The market process is a
A) path to discovery. B) simple process. C) theoretical concept that reveals little useful information. D) none of these choices.
Assume the bonds below have the same term and principal and that the state or local government that issues the municipal bond has a good credit rating. Which list has bonds correctly ordered from the one that pays the highest interest rate to the one that pays the lowest interest rate?
a. corporate bond, municipal bond, U.S. government bond b. corporate bond, U.S. government bond, municipal bond c. municipal bond, U.S. government bond, corporate bond d. U.S. government bond, municipal bond, corporate bond
The production possibilities curve shows all possible combinations of
A) two goods that are desired by society. B) two goods that can be efficiently produced with a given set of resources. C) two goods that can be purchased given the prices of the goods. D) two goods that two countries can trade with each other.