A market economy allocates resources primarily in accordance with orders from government bureaucrats

Recessions occur because of

A) difficulties in coordinating economic affairs. B) shocks to technology. C) real adverse shocks to the economy. D) all of the above.

Refer to Figure 15-13. In the figure above, if the economy in Year 1 is at point A and is expected in Year 2 to be at point B, then the appropriate monetary policy by the Federal Reserve would be to

A) lower income taxes. B) raise interest rates. C) raise income taxes. D) lower interest rates.