The diagram above illustrates the pattern of:
a. Business cycles
b. Economic growth patterns
c. Wage movements over time
d. Price level movements
Answer: a. Business cycles
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A decrease in investment causes the price level to ________ in the short run and ________ in the long run
A) decrease; decrease further B) increase; decrease C) increase; increase further D) decrease; increase
Refer to Figure 26-9. In the figure above suppose the economy is initially at point A. The movement of the economy to point B as shown in the graph illustrates the effect of which of the following policy actions by the Federal Reserve?
A) an increase in the required reserve ratio B) an open market sale of Treasury bills C) an open market purchase of Treasury bills D) a decrease in income taxes
The system of trade rounds under GATT and the WTO has been successful at creating trade rules and reducing trade barriers
Indicate whether the statement is true or false
In a one-period economy
A) consumption equals disposable income. B) consumption equals disposable income plus the value of non-market work. C) savings is always positive. D) consumers may increase their consumption by borrowing.