Which of the following is characteristic of a downturn in the business cycle?
A. Increased aggregate demand.
B. Lower unemployment rates.
C. Lower real output.
D. None of the choices are correct.
Answer: C
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Even though it may seem that nations have a wide variety of policy options to stabilize their economies, there are a number of issues to be considered and overcome. Which of the following is NOT an issue confronting policy makers?
A) the desire to maintain fixed exchange rates or membership in a pegged currency bloc B) long and uncertain time lags when policy effects will occur C) the pass-through issue, when little effect occurs on the real effective exchange rate D) international controls that limit the ability of any nation to determine its exchange rate policy
Cost-push inflation: a. occurs when the aggregate demand curve shifts rightward
b. occurs when the aggregate supply curve shifts rightward. c. results in a decrease in the unemployment rate. d. results in a movement along the aggregate demand curve. e. is caused by the same factors that lead to demand-pull inflation.