A counterparty to a financial instrument is always the:
A. person or institution that purchases the financial instrument.
B. person or institution that is on the other side of the financial contract.
C. government agency guaranteeing the value of the instrument.
D. issuer of the financial instrument.
Answer: B
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The curve that displays total planned real spending on goods and services at each price level by households, businesses, the government, and foreign residents is called
A) the employment curve. B) the aggregate demand curve. C) the price level curve. D) the aggregate supply curve.
If the price of leather (an input for leather shoes) increases, the equilibrium price of leather shoes will increase and the equilibrium quantity of leather shoes will decrease
a. True b. False
Which of the following is often watched closely as a clue to potential changes in consumer prices in the future?
A. The COLAs. B. The GDP deflator. C. The CPI. D. The PPI.
Refer to the diagram. Point b would not be permanent because the:
A. economy would move from b to a on PC 1 .
B. short-run Phillips Curve would shift from PC 1 to PC 2 and unemployment would increase to the natural rate at c.
C. economy would immediately move from b to c to d.
D. economy would move from b directly to d.