External shocks to an economy include:
Disruptions in trade, wars, and natural disasters.
Which of the following are policy levers?
Government regulation, tax policy, and the availability of money
Refers to the collective behavior of all buyers.
The value of output in constant prices is measured by:
According to the real balances effect, when the price level:
Falls, cash is worth more and therefore people buy more.
Which of the following suggests that lower average prices stimulate more borrowing?
The interest rate effect
The inability of labor-force participants to find jobs is known as:
An increase in the average level of prices of goods and services is known as:
Fiscal policy includes:
An increase in taxes.
Which of the following could cause a recession?
A decline in aggregate demand