We can use the theory of consumer choice to analyze
a. why most demand curves slope downward.
b. the tradeoff between work and leisure
c. how interest rates affect household saving.
d. All of the above are correct.
d
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A recession is commonly defined as occurring when
A) real GDP decreases for a period of 12 or more months. B) real GDP decreases for a period of 6 or more months. C) the unemployment rate rises above 7.5 percent for 6 or more months. D) the unemployment rate rises above 5.0 percent for 12 or more months.
In the real business cycle theory, business cycle contractions begin as a result of changes in
A) aggregate GDP. B) aggregate spending. C) aggregate demand. D) aggregate consumption. E) long-run aggregate supply.
Suppose policy makers wish to increase steady state consumption per worker. Explain what must happen to the saving rate to achieve this objective
What will be an ideal response?
A trade deficit occurs when:
A. government revenue exceeds government spending. B. exports are less than imports. C. exports exceed imports. D. government spending exceeds government revenue.