In Figure 20.2, the increase in Real GDP might reflect 
A. increased consumer confidence.
B. a weaker currency.
C. increased current government spending.
D. increased worker productivity.
Answer: D
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Research on productivity shocks has shown that
A) productivity shocks have only nominal effects. B) there have been no identifiable productivity shocks in the U.S. economy since World War II. C) small productivity shocks can explain large business cycle fluctuations. D) large productivity shocks produce only small deviations in aggregate output.
In the markets for goods and services in the circular flow diagram, households act as
To the extent that consumers base spending decisions on their permanent income, attempts to fine-tune fiscal policy with temporary tax changes are more effective
Indicate whether the statement is true or false
The term "shortage" refers to a:
A. situation in which the quantity supplied is less than the quantity demanded. B. situation in which the quantity demanded is less than the quantity supplied. C. signal that producers need to decrease the price of the good. D. market in which goods have to be sold quickly or the goods tend to rot or otherwise expire.