An increase in the unemployment rate may be represented as a movement from a point on the production possibilities frontier to a point inside the frontier

Attempts to fine-tune the economy through counter-cyclical fiscal policy

A) demonstrated their effectiveness in the 1930s. B) demonstrated their effectiveness during World War II. C) demonstrated their effectiveness between 1945 and 1960. D) have not yet demonstrated their effectiveness.

The distinction between real and nominal shocks is that

A) real shocks directly affect only the IS curve, but not the FE line or LM curve. B) real shocks directly affect only the FE line, but not the LM curve. C) real shocks directly affect only the IS curve or the FE line, but not the LM curve. D) real shocks have a large direct effect on the IS curve and the FE line, but only a small direct effect on the LM curve.