The four components of aggregate expenditure (AE) are:
A. consumption, investment, exports, and imports.
B. consumption, investment, government, and capital spending.
C. consumption, investment, government, and net export spending.
D. consumption, internet, government, and capital spending.
C. consumption, investment, government, and net export spending.
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The Chairman of the Federal Open Market Committee is also
A) the president of the Federal Reserve Bank of New York. B) the chairman of the Securities and Exchange Commission. C) the chairman of the Federal Deposit Insurance Corporation. D) the chairman of the Board of Governors.
Which of the following is the least likely take place if the Fed responds to a negative demand shock by reducing the real interest rate?
A) IS shifts to the right B) output gap returns to zero C) inflation returns to its previous rate D) MP shifts down