Suppose a recession occurs as a result of a supply shock, and instead of the economy naturally working its way back to equilibrium, the government uses policy to shift the aggregate demand curve to fight the recession. Using policy this way would
A) quickly result in a new, higher level of real GDP and a permanently lower price level.
B) bring real GDP back to potential GDP more slowly but would bring the price level back to the original price level more quickly.
C) bring the price level back to its original level more quickly but would result in a permanently lower level of potential GDP.
D) bring real GDP back to potential GDP more quickly but would result in a permanently higher price level.
D
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A crucial national income accounting identity has (S + T) equal to
A) I + G - NX. B) I + G + F. C) I + NX. D) G + F. E) I + G + NX.
David increases the number of companies in which he holds stocks
a. This reduces risk's standard deviation and firm-specific risk. b. This reduces risk's standard deviation and market risk. c. This raises market risk, but lowers firm-specific risk. What happens to overall risk is unclear. d. This raises firm-specific risk, but lowers market risk. What happens to overall risk is unclear.
When consumers' purchasing power decreases, the economy will experience a period of
A. contraction. B. expansion. C. containment. D. emergence.
The sample size for a time series data set is the number of:
A. variables being measured. B. time periods over which we observe the variables of interest less the number of variables being measured. C. time periods over which we observe the variables of interest plus the number of variables being measured. D. time periods over which we observe the variables of interest.