When GDP decreases, consumption spending increases.
Answer the following statement true (T) or false (F)
False
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The major difference in the efficacy of monetary policy relative to fiscal policy is
A) the longer recognition lag for fiscal policy. B) the shorter recognition lag for fiscal policy. C) the longer legislative lag for fiscal policy. D) the longer data lag for fiscal policy.
Which of the following best describes the "guiding function" of price?
A) In response to a surplus or shortage in two markets, price serves as a "guiding function" by decreasing in one market and increasing in the other market in the short run. B) The guiding function of price is the movement of resources into or out of markets in response to a change in the equilibrium price of a good or service. C) The guiding function of price occurs when the market price changes to eliminate the imbalance between supply and demand caused by a shortage or surplus at the original price. D) The guiding function usually occurs in the short run while the rationing function usually occurs in the long run.
A limit on the dollar worth of oranges imported into the United States is an example of a quantity quota
a. True b. False Indicate whether the statement is true or false
Matty and Rudy are the same age, live in the same town, and hold similar jobs a similar distance from their respective homes. They are so similar, in fact, that to the insurance company, they look the same and are offered the same insurance options. However, Matty has never been a particularly good driver and so buys a lot of auto insurance. Rudy, on the other hand, takes pride in being an excellent driver and so only carries the minimum insurance required. This example illustrates the potential for :
A. adverse selection. B. diversification. C. risk pooling. D. risk aversion.