If most shocks to the economy are ________ shocks, then ________.
A) aggregate demand; inflation stabilization policy will also stabilize activity in the short-run
B) permanent aggregate supply; inflation stabilization policy will also stabilize activity in the short-run
C) temporary aggregate supply; inflation stabilization policy has no impact on economic activity in the long-run
D) all of the above
E) none of the above
Question 2
A theory of saving is necessarily a theory of consumption, because ________.
A) by definition, any unit of disposable income that is not a consumption expenditure is a unit of saving
B) consumption decisions are made after saving has occurred
C) private saving is equal to private investment
D) the goal of consumption choices is to achieve the desired level of savings
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