An initial leftward shift in labor demand often creates a cascading chain of events, amplifying the impact of the initial shock. This is known as the ________ effect

Over the business cycle, factors such as the quantity of capital, human capital and technology

A) change randomly, sometimes growing, sometimes falling. B) change drastically, fluctuating more than the quantity of labor employed. C) fluctuate about the same amount as the quantity of labor employed. D) grow but do not fluctuate as much as the quantity of labor employed. E) do not grow and are therefore not the source of economic growth.

In Figure 4-6 above, with IS0 shifting to IS1 against the upward-sloping LM curve, at point 1

A) there is an excess demand for money. B) there is an excess supply of money. C) the demand for output exceeds Y1. D) the demand for output is below Y1.