In real business cycle models, a change in willingness to work ________
A) is associated with productivity shocks
B) causes a shift of the aggregate demand curve
C) would violate the market-clearing assumption
D) has no effect on potential output
A
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A leading game-console manufacturer slashes the price of its flagship product by ten percent. Holding other things such as income and preferences constant, which of the following is the most likely group behavior prediction? a. Price reduction will have no impact on purchase patterns
b. Price reduction will be associated with a reduction in quality; thereby reducing sales. c. More game consoles will be sold at lower prices. d. Group behavior cannot be predicted.
Crowding out refers to a decline in ________ as a result of an increase in ________
A) tax revenues; unemployment B) government purchases; tax rates C) government purchases; private expenditures D) private expenditures; government purchases