Unit 3A Test Answers

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Consumers spend less, causing worker layoffs.

Demand falls, causing production to stay at its peak.

A recession begins, causing consumers to spend more.

Goods are overproduced, causing a surplus in jobs.

What is one consequence of stagflation?

The economy drastically slows down as money loses its buying power.

Producers cannot keep up with consumer interest and raise their prices.

There are not enough workers to meet the rising level of production.

Demand is too high and people spend more money than they should.

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by earning interest

by selling the asset for a profit

by raising capital

by growing the asset

This is a graph of the business cycle.Time is measured along the x-axis. What is measured along the y-axis?

employment levels

prices

economic output

demand

Economic interactions involving which of the following would most likely be studied in macroeconomics?

a family’s finances

trade at a duty-free shop on the U.S.-Canadian border

International Monetary Fund policy

a small company’s supply contract for a local town

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