A reasonable dynamic assumption for the IS-LM model is that
A) the economy is always on both the IS and LM curves.
B) the economy is always on the IS curve, but moves only slowly to the LM curve.
C) the economy is always on the LM curve, but moves only slowly to the IS curve.
D) the money market is quick to adjust, but the bond market adjusts more slowly.
E) adjustment to the new IS-LM equilibrium is instantaneous after an LM shift, but not after an IS shift.
C
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An expansion occurs when the level of real GDP is
A) increasing. B) decreasing. C) at a cyclical peak. D) at a cyclical trough.
When computing the opportunity cost of attending a basketball game you should include
a. the price you pay for the ticket and the value of your time. b. the price you pay for the ticket, but not the value of your time. c. the value of your time, but not the price you pay for the ticket. d. neither the price of the ticket nor the value of your time.