For a fixed inflation rate target, a decrease in the inflation rate corresponds to a ________ the aggregate demand curve and a decrease in exogenous spending corresponds to a ________ the aggregate demand curve.
A. movement down; shift left of
B. shift left of; shift right of
C. shift left of; movement up
D. movement up; shift right of
Answer: A
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When the Fed decides to enact expansionary monetary policy, the supply of loanable funds:
A. and the demand for loanable funds both decrease. B. and the demand for loanable funds both increase. C. increases, while the demand for loanable funds decreases. D. decreases, while the demand for loanable funds increases.
Which of the following is a valid concern about the national debt for a country whose debt is held entirely by its citizens?
a. The welfare of future generations will be directly related to the per capita size of the national debt that they inherit. b. Growth of the national debt will eventually lead to the bankruptcy of the government. c. When the debt comes due, future generations may be unable to pay it off. d. If the increases in the national debt reduce private expenditures on capital formation, future generations may have lower incomes because they will inherit a smaller stock of capital.
Which of the following statements is true about production-possibility curves?
A. Constant-cost production-possibility curves are convex to the origin. B. Constant-cost production-possibility curves are straight lines and usually lead to complete specialization under free trade. C. Under free trade, bowed-out production-possibility curves are associated with partial specialization, because the opportunity cost of producing each good is constant along the curve. D. Increasing-cost production-possibility curves provide us with information about consumer preferences.
The gross domestic product (GDP) is the market value of all goods and services produced by the economy in one year.
Answer the following statement true (T) or false (F)