Refer to Figure 24-4. In the figure above, AD1, LRAS1 and SRAS1 denote AD, LRAS and SRAS in year 1, while AD2, LRAS2 and SRAS2 denote AD, LRAS and SRAS in year 2
Given the economy is at point A in year 1, what is the actual growth rate in GDP in year 2?
A) 2.5% B) 7.3% C) 8.0% D) 10.0%
B
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Satellite TV is a close substitute for cable TV. In the 1990s, small satellite TV units were developed that made it less costly for individual consumers to subscribe to satellite TV service. This caused the price elasticity of demand for cable TV service to:
A. shift to the left. B. become more inelastic. C. become more elastic. D. become less elastic.
In 2008, the financial and housing crisis caused firms to decrease their profit expectations. As a result, there was a ________ in the ________ for loanable funds curve
A) leftward shift; demand B) movement upward along; demand C) leftward shift; supply D) movement downward along; supply
National debt is likely to fall when
A. there is a succession of budget deficits. B. government’s expenditure falls short of its receipts. C. government’s expenditures exceed its receipts. D. government expenditure equals revenue.
Over the two decades leading up the 2008 crisis, __________ interest rates meant that consumers could take on _____ debt without significantly increasing the amount of debt service they had to pay.
A. falling; more B. rising; more C. falling; less D. rising; less