A significant adverse supply-side shock to the U.S. economy in mid-2008 came from
A. the plummeting world price of crude oil.
B. increased federal spending on "shovel-ready" infrastructure projects.
C. a tripling of world crude oil prices.
D. all of the options are correct.
Answer: C
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The Policy Trilemma states that a country or a monetary union can't pursue the following three policies at the same time
A) capital control, a fixed exchange rate, and an independent monetary policy. B) free capital mobility, a fixed exchange rate, and an independent monetary policy. C) free capital mobility, a flexible exchange rate, and an independent monetary policy. D) capital control, a flexible exchange rate, and an independent monetary policy.
If the equilibrium price of an hour with a tax accountant is $65 and the market price is currently $55, then there is a
A. surplus of accountants. B. shortage of accountants. C. equilibrium.
Which of the following does not describe a characteristic of short-term economic fluctuations?
A. The unemployment rate rises during recessions. B. Expansions and recessions are felt throughout the economy. C. Durable-goods industries are less sensitive to short-term fluctuations than service and non-durable industries. D. Expansions and recessions are irregular in length and severity.
An increase in the marginal propensity to consume (MPC) will cause the consumption function to become steeper.
a. true b. false