During the Great Depression:
A. overall GDP rose.
B. investment increased, but consumption decreased.
C. both consumption and investment decreased.
D. investment fell, but consumption increased.
C. both consumption and investment decreased.
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Refer to Figure 2-7. Assume that in response to changing consumer demands, Apple cuts back on the production of self-driving automobiles and increases its production of traditional automobiles. This strategy is best represented by the
A) movement from K to L in Graph C. B) movement from F to E in Graph A. C) movement from G to J in Graph B. D) movement from J to H in Graph B.
In an efficient market with rational expectations, the actual price of an asset
A) will equal its expected price. B) will often be below its expected price. C) will often be above its expected price. D) equals its expected price plus a random error term.
Understanding the distinction between positive and normative economic statements is important because it
a. enables us to derive better forecasts of macroeconomic aggregates such as GDP b. explains why economics is not a physical science c. is the primary distinction between macroeconomics and microeconomics d. provides a framework for understanding differences among economists e. enables us to see the rationale behind economic models
Under which of the following circumstances should we be concerned about a rising national debt?
a. When it rises at a slower pace than GDP. b. When the government runs deficits over a long period of time, such as a decade. c. When it rises at a faster pace than GDP. d. When the government does not run enough surpluses to counteract prior deficits. e. When it rises at a slower pace than the money supply.