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6 Multiple Choice 2 points
Suppose there is an increase in autonomous spending. Specifically, suppose $c_0$ increases where $C = c_0 + c_1 Y_D$. This increase in autonomous spending will cause which of the
following to increase, holding all else equal?
all of these
equilibrium disposable income
demand
equilibrium income
none of these
7 Multiple Choice 2 points
The Phillips curve shows that when the unemployment rate is lower than the natural rate,
inflation is higher than expected
inflation is lower than expected
policy rate is lower than expected
policy rate is higher than expected
8 Multiple Choice 2 points
When a government reduces its deficits by increasing taxes, in the short run,
IS curve shifts inward to the left
output returns to potential
interest rate is higher
output increases