Refer to Figure 11.1. Assume the economy is in equilibrium at 1 = 0. Other things equal, a negative demand shock such as the financial crisis of 2007-2009 would result in a movement from point ________ to point ________

Which procedure seems to be most useful to structure a macroeconomic analysis?

a. (1) Analyze the chain reaction of economic causes and effects; (2) Describe the economic setting in the three key markets; (3) Identify the economic shock. b. (1) Identify the economic shock; (2) Analyze the chain reaction of economic causes and effects; (3) Describe the economic setting in the three key markets. c. (1) Identify the economic shock; (2) Describe the economic setting in the three key markets; (3) Analyze the chain reaction of economic causes and effects. d. (1) Describe the economic setting in the three key markets; (2) Identify the economic shock; (3) Analyze the chain reaction of economic causes and effects. e. (1) Describe the economic setting in the three key markets; (2) Analyze the chain reaction of economic causes and effects; (3) Identify the economic shock.

If the price of a product increases, then

A. the budget line rotates and the optimal quantity demanded, which corresponds to the higher price, increases. B. the budget line shifts inward and the optimal quantity demanded, which corresponds to the higher price, increases. C. the budget line shifts outward and the optimal quantity demanded, which corresponds to the higher price, decreases. D. the budget line rotates and the optimal quantity demanded, which corresponds to the higher price, decreases.