A decrease in spending on new homes will, other things being equal:
A. increase aggregate demand.
B. decrease aggregate demand.
C. increase aggregate supply.
D. decrease aggregate supply.
Answer: B
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The use of money allows trade to be roundabout
a. True b. False Indicate whether the statement is true or false
Traditionally, a recession defined by declining Real GDP lasts over a period of at least
A. two consecutive calendar years. B. two consecutive calendar quarters. C. one calendar year. D. one calendar quarter.
The "crowding out" effect refers to the:
A. increase in domestic investment by foreigners, leaving little investment choice for domestic investors. B. reduction in the interest rate caused by governments running a deficit. C. reduction in domestic investment caused by governments running a deficit. D. irrational exuberance of the market reducing the number of rational investments available.
Your income rises from $1,000 a year to $10,000 and your purchases of beer increase from 10 to 20. What number below most closely approximates your income elasticity over this range?
A. 2.5 B. 4 C. 1 D. 0.4