Economists use the term shocks to mean

A) unexpected government actions that affect the economy.
B) typically unpredictable forces that have major impacts on the economy.
C) sudden rises in oil prices.
D) the business cycle.

B

Economics

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Monetary policy pushed interest rates to historically low levels during 2002-2004, but was more restrictive during 2005-2006 . Economic analysis indicates that this policy

a. helped to smooth the ups and downs of the business cycle during this era. b. contributed to the boom and bust of the housing market, and thereby the instability of this era. c. contributed to the housing bust of 2002-2004, but helped to restore stability to the housing market in 2006-2008. d. helped to bring inflation under control during 2002-2004, and thereby established a foundation for a strong recovery during 2007-2010

Economics

If the marginal propensity to save in a closed economy is .25 and a lump-sum tax is imposed, the slope of the economy's aggregate expenditures schedule will be:

A. .25. B. less than the slope before the tax. C. greater than the slope before the tax. D. .75.

Economics