A change in the price of one good results in a rotation of the budget line around the point at which the consumer is currently consuming, so that it is steeper or flatter.
Answer the following statement true (T) or false (F)
False
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To close an expansionary gap, the Fed ________ interest rates which ________ aggregate spending and ________ short-run equilibrium output.
A. raises; decreases; increases B. raises; decreases; decreases C. raises; increases; increases D. reduces; increases; decreases
Which of the following is an example of monitoring and enforcement costs?
A) Isabel knows that other neighbors' sleep patterns must also be affected by the howling dogs in her neighborhood and sets out to find those neighbors. B) Isabel is bound and determined to to find out which of her neighbors owns the howling dogs that are preventing her from getting a full night's slee
Government spending and taxation determine the position of the ________ curve and, where that curve intersects the vertical line at YN, the ________ target of monetary policy
A) IS, inflation rate B) IS, real interest rate C) LM, inflation rate D) LM, real interest rate
The increased stability of the financial system in the United States since 1950 can help explain
A) why the United States has only experienced one recession since 1950. B) the severity of the 2007-2009 recession. C) the increase in the gap between potential GDP and real GDP. D) the decrease in severity of business cycle fluctuations.