How will a recession in the economies of our foreign trading partners affect US AD?
A. no effect on AD
B. AD will increase
C. AD will decrease
D. depends on whether US offers financial aid to these countries
Ans: C. AD will decrease
You might also like to view...
Refer to Figure 1A.1. Assume that the graph in this figure represents the demand and supply curves for women's clothing. An increase in the wage rate for seamstresses would be represented by a shift from
A) Demand 1 to Demand 2. B) Demand 2 to Demand 1. C) Supply 1 to Supply 2. D) Supply 2 to Supply 1.
Is it possible for the economy to be at full employment and still have some people who are unemployed?
A) No, full employment means that no one is unemployed. B) Yes, since full employment exists if the economy is operating at the natural unemployment rate and there is always some natural unemployment. C) Yes, since full employment exists if the economy is operating at the frictional unemployment rate and there is always some frictional unemployment. D) Yes, since full employment equals the sum of the cyclical unemployment rate and the natural unemployment rate, and there is always some cyclical unemployment. E) none of the above
The short-run output expansion path is ________ in the relevant area.
A. upward sloping B. U-shaped C. horizontal D. a ray
When the Fed lowers the discount rate, it makes it:
A. cheaper for banks to borrow from each other. B. cheaper for banks to obtain additional reserves by borrowing from the Fed. C. more difficult for banks to accept deposits. D. more difficult for banks to extend loans.