If the economy is near full capacity, the effect of a negative aggregate demand shock is to
A) increase the level of aggregate demand.
B) cause the price level to fall.
C) increase the firm's cost of producing at every level of output.
D) increase the level of employment.
B
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After graduating from college, Yunis, age 22, started working for his parents' real estate business as an unpaid assistant. He works 25 hours a week helping manage rental units. In the Current Population Survey, Yunis is considered
A) part of the labor force and unemployed. B) part of the labor force and employed. C) not part of the labor force. D) a discouraged worker. E) part of the labor force but not part of the working-age population.
When (if at all) can the crowding-out effect be prevented?
A) when the Fed decreases the money supply to accommodate the expansionary fiscal policy B) when the real money supply is held constant C) when the real balance effect is working D) when the Fed allows the real money supply to increase sufficiently to keep the interest rate from rising
In 2011, the Census Bureau introduced an alternate poverty measure that is based on:
A. the price of food, and adjusts for geographic differences in the cost of living. B. the prices of food, clothing, shelter, and utilities, and adjusts for geographic differences in the cost of living. C. the price of housing, and adjusts for geographic differences in the cost of living. D. the average income of the lowest quartile of income earners.
If an economy is above potential output and the government opts for a contractionary fiscal policy (running surpluses) to shift the AD curve, an economist with a Classical view, who holds the Ricardian equivalence theorem to be practically true, would conclude that the AD curve:
A. does not shift since the lower government spending is offset by higher private consumption. B. shifts to the left due to lower government spending. C. does not shift since the lower government spending is offset by lower private consumption. D. shifts to the right due to lower government spending.