According to this Application, if the volatility of energy prices led to expectations of declining real GDP, investment spending at that time would tend to decrease
This relationship between the decrease in investment spending and the expected decline in real GDP would be expressed by the
A) present value theory. B) liquidity principle.
C) accelerator theory. D) real-nominal principle.
C
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Which of the following does NOT contain an externality?
A) I sell you an ice cream and you drip it all over the person sitting next to you. B) I sell you an ice cream and it gives you a headache. C) I sell you an ice cream and you share it with your friend. D) I give you an ice cream and you share it with a friend.
The financial market shock which occurred during the recession of 2007-2009 increased the default-risk premium, and the housing shock which occurred during the recession of 2007-2009 reduced wealth and residential construction
These two events would result in A) a movement up along the Phillips curve. B) a movement down along the Phillips curve. C) an upward shift of the Phillips curve. D) a downward shift of the Phillips curve.