In the above figure, point A represents
A) a recessionary gap.
B) a full-employment equilibrium.
C) an inflationary gap.
D) an increase in aggregate demand.
A
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Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for frozen yogurt. Which panel describes what happens in the market for frozen yogurt when the price of ice cream, a substitute product, increases?
A) Panel (a) B) Panel (b) C) Panel (c) D) Panel (d)
By definition, M1 includes
a. savings accounts b. money market mutual accounts c. repurchase agreements d. small denomination time deposits e. travelers' checks
If the risk of buying U.S. assets rises because it is discovered that lending institutions had not carefully evaluated borrowers prior to lending them funds, then
a. net capital outflow and the real exchange rate will rise. b. net capital outflow will rise and the real exchange rate will fall. c. net capital outflow will fall and the real exchange rate will rise. d. net capital outflow and the exchange rate will fall.
People basically borrow in order to
A. have more funds. B. go into debt. C. have interest payments. D. have current consumption rather than waiting to consume in the future.