Assume the central bank decides to pursue contractionary monetary policy. Where and how should you begin your analysis when analyzing the chain reaction of economic interactions?
a. Start the analysis in the real goods market with aggregate demand shifting to the right.
b. Start the analysis in the real credit market with demand for real credit shifting to the left.
c. Start the analysis in the real credit market with demand for real credit shifting to the right.
d. Start the analysis in the real credit market with supply of real credit shifting to the left.
e. Start the analysis in the real credit market with supply of real credit shifting to the right.
.D
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The price of a stock is equal to the present value of expected future dividend payments from the stock
Indicate whether the statement is true or false
Need-based spending ________ during an expansion and ________ during a recession, which leads to larger budget deficits during the ________ phase of the business cycle
A) increases; decreases; recession B) decreases; increases; expansion C) decreases; increases; recession D) decreases; decreases; expansion E) increases; decreases; expansion