U.S. Financial Crisis. Suppose that foreigners had reduced confidence in U.S. financial institutions and believed that privately issued U.S. bonds were more likely to be defaulted on.
a. rise which by itself would increase aggregate demand.
b. rise which by itself would decrease aggregate demand.
c. fall which by itself would increase aggregate demand.
Ans: a. Rise which by itself would increase aggregate demand.
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The basic human tendency to overvalue recent experience when trying to predict the future is called:
A. tulip mania. B. the leverage effect. C. herd instinct. D. the recency effect.
If Armenia can produce rugs more efficiently than any other country, it does not necessarily benefit from producing rugs for international trade
a. True b. False
When the Federal Open Market Committee sells U.S. government securities in the open market, the money supply is reduced
Indicate whether the statement is true or false
Suppose there is currently a tax of $50 per ticket on airline tickets. Buyers of airline tickets are required to pay the tax to the government. If the tax is reduced from $50 per ticket to $20 per ticket, then the
a. demand curve will shift upward by $30, and the price paid by buyers will decrease by less than $30. b. demand curve will shift upward by $30, and the price paid by buyers will decrease by $30. c. supply curve will shift downward by $30, and the effective price received by sellers will increase by less than $30. d. supply curve will shift downward by $30, and the effective price received by sellers will increase by $30.