Refer to Figure 18-1. Suppose that the U.S. government deficit decreases, causing interest rates in the United States to fall relative to those in the European Union. Assuming all else remains constant, how would this be represented?
A) Supply would increase, demand would increase and the economy moves from D to A to B.
B) Supply would decrease, demand would increase and the economy moves from A to D to C.
C) Demand would increase and the economy moves from A to B.
D) Demand would decrease and the economy moves from B to A.
D
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a. Adverse selection b. Moral hazard c. Both of the above d. None of the above
Attempts by the government to reduce the rate of inflation often result in higher unemployment in the short run
a. True b. False Indicate whether the statement is true or false
The incentives built into nearly all welfare programs
A. discourage savings. B. encourage marriage. C. encourage family planning. D. encourage work.
A ________ traces out the behavior of the economy over time
A) dynamic equilibrium B) static equilibrium C) steady-state equilibrium D) comparative equilibrium