Assuming aggregate supply is upward-sloping and aggregate demand is downward-sloping, a sudden reduction in a nation’s exports will
a) cause inflation
b) cause recession
c) cause stagflation
d) increase GDP and reduce prices
e) increase GDP and raise equilibrium prices
b) cause recession
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Sometimes banks tend to invest in risky stocks because the deposits of their customers are insured by the Federal Deposit Insurance Committee. This behavior is an example of ________
A) adverse selection B) moral hazard C) the paradox of thrift D) the free-rider problem
A likely effect of government policies that redistribute income and wealth from the wealthy to the poor is that those policies
a. enhance equality. b. enhance efficiency. c. increase the reward for working hard. d. All of the above are correct.
The government of Blenova considers two policies. Policy A would shift AD right by 500 units while policy B would shift AD right by 300 units. According to the short-run Phillips curve, policy A will lead
a. to a lower unemployment rate and a lower inflation rate than policy B. b. to a lower unemployment rate and a higher inflation rate than policy B. c. to a higher unemployment rate and lower inflation rate than policy B. d. to a higher unemployment rate and higher inflation rate than policy B.
Describe in words how one can recognize the market equilibrium point in a graph of a demand schedule and a supply schedule
Please provide the best answer for the statement.