Refer to Figure 10.3. A negative demand shock accompanied by an increase in the real interest rate is best represented by ________ in panel (a) and ________ in panel (b)
A) a shift from AE3 to AE2; a movement from point C to point B
B) a shift from AE2 to AE3; a shift from IS1 to IS2
C) a shift from AE2 to AE1; a movement from point B to point A
D) a shift from AE3 to AE1; a movement from point C to point A
D
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If the federal government tries to make fiscal policy sustainable by decreasing expenditure on government capital goods, private capital goods will become ________ productive, and this will result in ________ potential GDP
A) more; lower B) more; higher C) less; lower D) less; higher
If the required reserve ratio (RRR) is 10 percent and the Fed sells a $5,000 bond to an individual who pays for it with a check, the money supply will
a. not change b. decrease by $4,500 c. increase by $4,500 d. decrease by $5,000 e. increase by $5,000
The primary determinant of a country's standard of living is
a. the country's ability to prevail over foreign competition. b. the country's ability to produce goods and services. c. the total supply of money in the economy. d. the average age of the country's labor force.
In the United States, inheritance accounts for roughly ________ of income inequality.
A. 10 percent B. 30 percent C. 50 percent D. 20 percent