Exam 12: Short-Run Fluctuations

Jane was "upside down" or "under water" on her home loan.If her house was worth $200,000,what is a possible value for Jane's mortgage?

If the aggregate price level ________,but nominal wages stay fixed,labor demand ________.

The discovery of a new oilfield has attracted several new investors to Inventia.How will this affect Inventia's labor demand curve?

Economic growth is said to be persistent,meaning that if the economy is in an expansion this quarter,it will probably ________.

Which of the following is true of growth in developed and developing countries?

Which of the following is likely to increase household bankruptcies?

A contractionary monetary policy is likely to lead to ________.

If the credit supply curve of an economy shifts to the left and the credit demand curve remains unchanged,________.

What effect did falling housing prices in the late 2000s have on investment in residential construction?

Consumption spending adjusted for inflation is known as ________.

Agraria specializes in the production of cotton.However,cotton manufacturers in Agraria are expecting the demand for its exports to fall sharply because of growing competition from a neighboring country.Assuming all else equal,which of the following is likely to happen in this case?

An increase in the real interest rate leads to a(n)________.

How do consumption and investment tend to move during the business cycle?

A country's labor demand curve shifted to the right after the adoption of a new technology.This implies that the use of the new technology ________,assuming all else equal.

Explain the concept of a self-fulfilling prophecy.

Predicting when an expansion will end is ________; predicting when a recession will end is ________.

The ________ theory emphasizes that changes in prices and interest rates are the main reasons behind fluctuations in an economy.

Country X and Country Y are two neighboring countries that are experiencing a recession.The government of Country X reduced its expenditure during the recession,while Country Y's government increased the supply of money in the economy.Which of the two policies will help the economy recover from the recession?

The demand for automobiles fell when gasoline prices increased.Which of the following is likely to happen in this case,assuming all else equal?

By March 2009,declines in the housing market and the stock market crash had decreased total U.S.household wealth by about ________.