_{Choose the right answer:}

_{The Austrian school of thought believes that demand management policy should not be used because}

_{1 shifting AD to the right is likely to cause a falling price level.}

_{2 big government prefers deregulation policies, which shift aggregate supply right.}

_{3 big government has a bias towards inflationary policy.}

_{4 the economy is always at full employment.}

_{Which of the following scenarios shifts the US aggregate demand to the left?}

_{1 A decrease in US exports}

_{2 A decrease in US personal income tax rates}

_{3 A decrease in US real GDP}

_{4 An increase in the US aggregate price level}

_{The US is the destination for around 50% of Canadian exports. Holding other factors fixed, a recession in the U.S. should cause the Canadian:}

_{1 aggregate price level to fall and real GDP to rise}

_{2 aggregate price level to rise and real GDP to fall}

_{3 aggregate price level to rise and real GDP to rise}

_{4 aggregate price level to fall and real GDP to fall}

_{The aggregate supply curve shifts left if}

_{1 the government increases sales taxes}

_{2 there is a technological innovation allowing factories to produce goods more efficiently}

_{3 None of the proposed answer options is correct}

_{4 the government removes some environmental regulations that limit production methods}

If you are trying to forecast a coming recession, which of the following would be theleasthelpful?

1 Federal Reserve Bank of New York's Nowcasts

2 The Conference Board's index of Coincident Economic Indicators

3 The Conference Board's index of Leading Economic Indicators

4 Yield spread (long-term minus short-term interest rates)