The change illustrated in the figure above is part of the transmission process of the Fed's monetary policy
As a result of the increase in the supply of loanable funds, in the short run aggregate demand ________, aggregate supply ________, and potential GDP ________.
A) increases; does not change; does not change
B) increases; increases; increases
C) decreases; increases; increases
D) increases; decreases; decreases
E) decreases; decreases; decreases
A
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The rational expectations hypothesis indicates that people:
a. pay little attention to policy when forming their expectations about the future. b. expect the next period to be pretty much like the recent past, regardless of policy changes. c. will always be able to forecast the future accurately. d. change their expectations about the future if policy changes.
The use of _______________ policy should be countercyclical to counterbalance the business cycles of economic downturns and upswings.
a. monetary b. tax c. trade d. savings
Exhibit 14-6 Aggregate supply curve
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In Exhibit 14-6, when the economy moves from a GDP of $1,000 billion to a GDP of $1,100 billion,
A. higher wages will lower the cost of producing goods. B. real GDP and employment both increase, but only under conditions of constant prices. C. real GDP increases and employment decreases, but only under conditions of price level increases. D. real GDP and employment both increase, but only under conditions of price level increases.
Who believes that two-income families today are worse off than their one-income counterparts were in the 1970s?
A. Barbara Ehernreich B. Beth Schulman C. Elizabeth Warren and Amelia Warren Tyagi D. Jose Conseco