markets coordinate supply and demand so that a policy of laissez-faire would prevent recessions

economic fluctuations were the cumulative result of mistakes made by businesses and households in an uncertain world.

government demand could be used to smooth fluctuations in aggregate output and income

supply creates its own demand through the circular flow of economic activity

unemployment rates.

inflation rates

interest rates

economic growth rates.

Higher rates of inflation tend to precede periods of high economic growth.

The rate of inflation tends to rise in periods of high economic growth and fall in periods of low economic growth

More inflation results in less capacity utilization.

None of these

A French resident buys a Volkswagen car produced in Wolfsburg, Germany.

A French pharmaceutical firm builds a new factory in Poland for its subsidiary

A French national living in Switzerland buys a house in Switzerland

A French bank sells an Italian bond to another French bank

(S-I) +(T-G)+(X-Z)=0

(S-I) +(X-Z)=(T-G)

(S-I) +(T-G)=(X-Z)

(S-I) =(T-G)+(X-Z)