During a recession, markets will
A. decline.
B. increase.
C. increase then decrease.
D. move in many different directions.
Answer: A
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The credit spread refers to ________
A) the extent to which financial instruments are distributed among households at different income levels in a given society B) the difference between the London Inter-Bank Offered Rate (LIBOR) and the fed funds rate C) the price elasticity of household debt D) the interest-rate differential between risky bonds and U.S. Treasury bonds
Refer to Scenario 12.2. What is the profit maximizing level of output?
A) 171.43 B) 120 C) 150 D) all of the above E) none of the above
Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD3 the result in the short run would be:
A. P1 and Y2. B. P2 and Y3. C. P3 and Y1. D. P2 and Y2.
Some economists believe that deficit spending can impose a burden on future generations. Which of the following does NOT explain the burden?
A. Investment will be crowded out by an increase in current consumption. B. Future generations will have to be taxed at a higher rate. C. Future generations will have a smaller capital stock that will reduce their wealth. D. Deficit spending that is allocated to purchases leads to long-term increases in real GDP.