If we look at the annual U.S. unemployment rates over the last five decades, we see
A. peaks in 1982, 1992, 2002, and 2008, with each peak higher than the last
B. fairly small variations around the natural rate of 5.2%
C. fairly large variations but with the rate quickly returning to about 4% after each peak
D. that the unemployment rate exceeded 10% at least once
E. that the unemployment rate never exceeded 9%
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A shift of the AD-curve to the left can be caused by
A. a decrease in taxes
B. an increase in business and consumer confidence
C. an increase in nominal money supply
D. a decrease in government transfer payments
E. a decrease in money demand
The AD-curve has a negative slope since
A. firms will produce less if they have to lower their prices
B. lower prices mean higher real wages so firms can no longer afford to produce as many goods and services
C. a decrease in the price level increases real money balances, leading to lower interest rates and increased spending
D. lower prices drive up the demand for goods since buyers fear future market shortages
E. lower prices increase consumer confidence, which encourages spending
A shift of the AD-curve to the right could be caused by
A. a decrease in taxes
B. a decrease in government transfer payments
C. an increase in money demand
D. a decrease in defense spending
E. both A) and C)
An increase in aggregate demand can be caused by
A. an increase in government expenditures
B. an increase in nominal money supply
C. a decrease in taxes
D. an increase in business and consumer confidence
E. all of the above
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