The 1990 U.S. recession was
a. triggered by a negative supply shock
b. characterized by falling wage rates as the economy began to correct itself
c. relatively painless
d. triggered by a negative demand shock
e. characterized by disinflation
A
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An decrease in taxes combined with a decrease in government purchases would: a. increase AD
b. decrease AD. c. leave AD unchanged. d. have an indeterminate effect on AD.
Changes in relative prices during inflationary periods usually lead to
a. decreases in real income. b. some people gaining real income. c. increases in the purchasing power of money. d. increases in real income.
A firm's short-run supply curve is its marginal cost curve above its average variable cost curve.
Answer the following statement true (T) or false (F)
The decline in the price of American goods is due in part to:
A. trade barriers that allow domestic firms to lower prices. B. declines in productivity. C. globalization and increased trade. D. agglomeration effects of firms.