During the expansion phase of the business cycle, production, employment, and income ________
Fill in the blank(s) with the appropriate word(s).
Answer: increase
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The equilibrium real interest rate is 5 percent. If the real interest rate is
A) anything other than 5 percent, the supply of loanable funds curve and/or the demand for loanable funds curve will shift to move the real interest rate to 5 percent. B) 6 percent, the demand for loanable funds curve will shift rightward as firms enter the market to borrow at the lower rate. C) 2 percent, there is a shortage of loanable funds. D) 8 percent, there is a surplus of loanable funds. E) 3 percent, then the supply of loanable funds curve will shift leftward as new savers enter the market.
Unemployment caused by an imbalance between the skills possessed by workers and the skills demanded in labor markets is known as
a. structural unemployment. b. imbalance unemployment. c. frictional unemployment. d. cyclical unemployment.
Suppose a change in the stock market makes people feel wealthier, increases consumption, and shifts the aggregate-demand curve right. The change in the stock market must have been
a) an increase in stock prices. b) a decrease in stock prices. c) the stock market has no effect on wealth and consumption. d) no change in stock prices.
Private saving is negative when:
A. there is a government budget deficit. B. after-tax income of households and businesses is greater than consumption expenditures. C. after-tax income of households and businesses is less than consumption. D. there is a government budget surplus.