If business cycles are caused by changes in aggregate demand, you would expect to see
a. prices and unemployment moving in the same direction.
b. price and unemployment moving in opposite directions.
c. prices not moving with unemployment.
d. unemployment is not included in the Keynesian model.
B
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If the required reserve ratio is 10 percent, currency in circulation is $1,200 billion, checkable deposits are $1,600 billion, and excess reserves total $2,500 billion, then the excess reserves-checkable deposit ratio is
A) 1.56. B) 0.48. C) 0.72. D) 0.56.
A perfect market would have all but which of the following characteristics?
A) Infinitely divisible securities B) Asymmetric information C) Buyers and sellers of financial instruments would know the true quality of what they are buying and selling. D) Buyers and sellers could transact with each other without cost (no transactions costs).