Which component of consumption spending is the greatest in a typical economy?
A) services B) nondurable goods C) durable goods D) new housing
A
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An economy is at full employment. Which of the following events can create a recessionary gap?
A) an increase in foreign income B) an increase in taxes C) a decrease in the quantity of capital D) a decrease in money wages
Which of the following decades was characterized by the highest inflation rate in the U.S.?
a. 1920s b. 1930s c. 1950s d. 1970s e. 1960s
An economist who is studying the relationship between the money supply, interest rates, and the rate of inflation is engaged in:
A. macroeconomic research. B. microeconomic research. C. empirical research because there is no economic theory related to these variables. D. theoretical research because there is no data on these variables.
Refer to the graph above. Which of the following changes will shift AD 1 to AD 2?
A cut in personal and business taxes A shrinkage in the value of stocks and other financial assets An increase in the value of the dollar relative to other currencies An increase in real interest rates