Refer to the information provided in Figure 27.1 below to answer the question(s) that follow.
Figure 27.1Refer to Figure 27.1. Suppose the economy is at Point A a(n) ________ can cause a movement to Point C.
A. decrease in government purchases
B. increase in aggregate demand
C. decrease in aggregate demand
D. increase in government purchases
Answer: A
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The laissez-faire approach popular before the Great Depression influenced the U.S. government to see business downturns as: a. natural phases in an otherwise healthy system and to therefore take short-term deficit spending measures to help recovery. b. natural phases in an otherwise healthy system and to therefore wait for recovery to occur naturally
c. serious maladies in an otherwise healthy system and to therefore work to redesign the system to avoid such failure in the future. d. failures of the type of system Adam Smith envisaged and to therefore work to move toward an open economy with free trade. e. failures of the system to achieve the form that Adam Smith envisaged and to therefore work to decrease government interference at the micro level.
Microeconomics is concerned with:
A. the aggregate or total levels of income, employment, and output. B. a detailed examination of specific economic units that make up the economic system. C. positive economics, but not normative economics. D. the establishing of an overall view of the operation of the economic system.
Labor productivity is
A) the quantity of output produced in one hour by several workers. B) the quantity of capital one worker can produce in one day. C) the quantity of output produced by one worker or by one hour of work. D) the quantity of output produced in one hour by one machine.
Expansionary fiscal policy will
a. shift the aggregate demand curve to the left. b. shift the aggregate demand curve to the right. c. not shift the aggregate demand curve d. shift the short-run aggregate supply curve to the left.