Using Figure 2 above, suppose that the economy started at PAE2. A potential change that could cause the economy to go from PAE2 to PAE3 might be:
A. domestic income increases.
B. interest rates decrease.
C. wealth level decreases.
D. expected profitability of investments decrease.
Answer: B
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The system we use to measure the value of an economy is called:
A. national income accounting. B. national economic valuation. C. macroeconomic summation. D. national expenditure accounting.
How can fighting inflation cause a recession?
A. The Federal Reserve raises interest rates to intentionally slow down the economy. B. Businesses lay off workers as a way to keep prices from rising too fast. C. Households stop buying goods and services in response to higher prices. D. The federal government orders businesses to reduce prices, which raises interest rates.
Explain the three characteristics of utility
Please provide the best answer for the statement.
If government uses fiscal policy to restrain cost-push inflation, we can expect:
A. the unemployment rate to rise. B. the unemployment rate to fall. C. the aggregate demand curve to shift rightward. D. tax-rate declines and increases in government spending.