The ratchet effect would suggest that:
Refer to the graph above.
A. If AD1 shifts to AD2, the economy would move to point b
B. If AD1 shifts to AD2, the economy would move to point c
C. If AD2 shifts to AD1, the economy would move to point c
D. If AD2 shifts to AD1, the economy would move to point b
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Classical growth theory predicts that economic growth
A) is merely an illusion. B) will continue at the classical rate of 3 percent forever. C) occurs because of hard-working citizens. D) decreases the supply of labor. E) will eventually stop because of population growth.
A . If aggregate expenditure falls by $5 million, and the MPC is 0.8, explain the process that will drive the economy to a new equilibrium level. b. What will be the final result of this initial change?
In principle, exchange rates are for currencies what
a. the price of apples are for apples b. the current account is for the balance of payments c. surpluses on current account are for deficits on current account d. currencies are for capital accounts e. capital accounts are for current accounts
Because public goods are
a. excludable, people have an incentive to be free riders. b. excludable, people do not have an incentive to be free riders. c. not excludable, people have an incentive to be free riders. d. not excludable, people do not have an incentive to be free riders.