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Economics
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A financial crisis can lead to a recession because it can cause

  investment and income to fall, lowering saving and increasing the money supply.
  wealth and saving to fall, lowering investment and increasing the money supply.
  wealth and income to fall, reducing spending and ultimately reducing employment.
  investment and saving to fall, increasing spending and ultimately employment.

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Chika Ilonah
Chika IlonahLv10
28 Sep 2019

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Related questions

A) Which of the following is the most description of events when monetary authorities increase the size of commercial banks' excess reserves?

1.A rise in interest rates increase the money, causing a decrease in investment spending, output, and employment

2. A fall in interest rates decrease the money supply, causing an increase in investment spending, output, and employment

3. The money supply is increased, which decreases the interest rate, and causes investment spending, output, and employment to increase

4. The money supply is decreased, which increases the interest rate, and causes investment spending, output and employment to decrease

 

B) A tariff is a:

1. tax

2.Price ceiling

3. Quantity limit

4. Subsidy

Individual Retirement Accounts (IRAs) allow people to shelter some of their income from taxation. Suppose the maximum annual contribution to such accounts is $5,000 per person. Now suppose there is a decrease in the maximum contribution, from $5,000 to $3,000 per year. Shift the appropriate curve on the graph to reflect this change. This change in the tax treatment of interest income from saving causes the equilibrium interest rate in the market for loanable funds to (rise, fall) and the level of investment spending to (decrease, increase). An investment tax credit effectively lowers the tax bill of any firm that purchases new capital in the relevant time period. Suppose the government repeals a previously existing investment tax credit. Shift the appropriate curve on the graph to reflect this change. The repeal of the previously existing tax credit causes the interest rate to (rise,fall) and the level of saving to (rise, fall). Initially, the government's budget is balanced, then the government significantly increases spending on national defense without changing taxes. This change in spending causes the government to run a budget (deficit, surplus), which (increases, decreases)national saving. Shift the appropriate curve on the graph to reflect this change. This causes the interest rate to (fall, rise), (crowding out, increasing) the level of investment spending.

MACROECONOMICS

1. Which one of the following is not a determinant of aggregate demand?

a. Investment expenditure

b. Technology

c. Consumption expenditure

d. Net exports

2. An improvement in technology will?

a. Decrease aggregate demand

b. Increase aggregate demand

c. Increase aggregate supply

d. Decrease aggregate supply

3. Oil price changes in the mid 80's are an example of?

a. An exiernal supply shock increasing prices and reducing real income

b. An external supply shock decreasing prices and raising real income

c. An external supply shock increasing prices and reducing real in come

d. An external demand shock inceasing prices and reducing real in come

4. The oil shock in 1979-80 was an example of?

a. An external supply shock decreasing prices and increasing real income

b. An external supply shock increasing prices and decreasing real income

c. An external demand shock decreasing prices and real income

d. An external demand shock increasing prices and real income

5. Which one of the following does not cause the aggregate demand curve to slop downward?

a. Changes in relative prices between foreign and domestic goods

b. Wealth effect

c. Changes in real output

d. Changes in interest rate

6.Which one of the following is not determinant of aggregate supply?

a. Productivity

b. Disposal income

c. Capacity and investment plan

d. Cost and availability of resources

7. Which of the following relationship is correct?

a. Equilibrium employment and full employment may not be the same

b. Equilibrium employment and full employment are not related

c. Equilibrium employment and full employment are always the same

d. Equilibrium employment and full employment are never the same

8. Which of the following was not a factor limiting the severity of effects of the oil sopply shock of 1979-80?

a. Increase in use of alternative sources of energy

b. More efficient use of energy

c. Increased supplies of non-OPEC oil

d. More rapid worldwide economic growth

9. Which one of following does not cause the aggregate demand curve to slop downward?

a. Changes in relative prices between foreign and domestic goods

b. Interest rate changes

c. Wealth effect

d. Chnages in real output

10. With aggregate demand shocks?

a. teh aggregte supply curve moves up the aggregate demand curve and increases price and reduces real income

b. the aggregate demand curves moves up the aggregate supply curve and increases prices and real income

c. the aggregate demand curves moves down the aggregate supply curve and increases both prices and real income

d. the aggregate supply curve moves down the aggregate demand curve and reduces prices and increases in real income

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