Which of the following is not a situation involving external shock?
(A) Consumers reduce spending on expensive goods because the country has gone to war.
(B) Consumers use more gasoline because of lower prices due to the discovery of large deposits of oil.
(C) Consumers pay high prices for corn because of a severe drought.
(D) Consumers reduce spending because they fear that their nation is going to war.
Ans: (D) Consumers reduce spending because they fear that their nation is going to war.
You might also like to view...
Which of the following would be a part of macroeconomics?
A) the change in automobile sales due to a change in the price of automobiles. B) a tax reduction impact on the profits of a business. C) inflation. D) the unemployment of workers displaced by technological change in the typesetting industry.
Suppose that the government decided to increase interest rates in order to encourage saving. Would this likely lead to an increase in investment and higher future economic growth rates? Explain.
What will be an ideal response?