Suppose Mike and Renee are the only two people in a very simple economy and that they produce and exchange two goods, soda and pretzels. Which of the following might cause a recession in this simple economy?
a. Mike gets the idea that Renee wants more soda, which Mike produces.
b. Renee gets the idea that Mike wants more pretzels, which she produces.
c. Mike gets the idea that Renee wants less soda, which he produces.
d. Renee gets the idea that Mike wants less soda, which he produces.
e. The production of pretzels being equal to the production of soda.
C
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In comparison to a government that runs a balanced budget, when the government runs a budget deficit
A) business investment will fall. B) the equilibrium interest rate will fall. C) household savings will fall. D) none of the above
The primary market is where:
a. Debt and equity instruments are bought and sold after they are first issued. b. Primary real assets are linked with primary financial assets. c. Central banks and governments perform their pump-priming activities. d. Debt and equity instruments are bought and sold when they are first issued. e. None of the above.