If the equilibrium price of a good decreases and the equilibrium quantity of the good decreases, we can conclude that:
A. demand increased.
B. demand decreased.
C. supply increased.
D. supply decreased.
Answer: B
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A reduction in the required reserve ratio would cause the interest rates to
A. increase only if the level of investment is low relative to historic levels. B. decrease. C. increase. D. increase only if the level of unemployment is high.
A positive temporary supply side shock will:
A. increase the level of potential output in the long run. B. decrease the price level in the long run. C. increase the price level in the long run. D. have no effect in the long run.
Which of the following is TRUE regarding the circular flow diagram?
I. "Aggregate income" is the flow of income earned by firms. II. Retained earnings are considered income earned by firms rather than part of households' income. III. The government, households, and firms all have transactions in the goods market. A) I only B) I and II C) I and III D) III only
The above table shows answers given by people interviewed in the Current Population Survey. Which person is cyclically unemployed?
A) A B) B C) C D) none of the people