Refer to Figure 26-7. Suppose the economy is in a recession and no policy is pursued. Using the static AD-AS model in the figure above, this situation would be depicted as a movement from
A) B to A. B) C to D. C) A to B. D) C to B. E) A to E.
E
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Other things remaining the same, in the long run ________ in the quantity of money brings an equal percentage ________
A) a decrease; increase in the price level B) an increase; decrease in the price level C) a decrease; increase in the nominal interest rate D) a decrease; decrease in the price level E) an increase; increase in the real interest rate
In the short-run macro model, what type of unemployment is caused by insufficient spending?
a. Cyclical b. Structural c. Frictional d. Seasonal e. All types of unemployment are caused by insufficient spending
What happens to the piece rate if there is a ratchet effect?
A. It is replaced with a salary contract. B. It increases over time. C. It is only paid to the least productive workers. D. It is replaced with a time rate. E. It decreases over time.
Which of the following would lead to a decrease in bond demand?
A. An increase in wealth. B. A decrease in liquidity. C. A decrease in risk. D. An increase in expected inflation.