The condition of fully flexible wages and prices was assumed by A) no economists. B) the classical economists. C) modern economists. D) the Keynesian economists. ANSWER B
Date: September 2nd, 2020
Which of the following statements is TRUE? A) investment = disposable income + consumption B) saving = personal income + consumption C) saving = personal income – consumption D) saving = disposable income – consumption ANSWER D
Date: September 2nd, 2020
What is measured on the horizontal axis of the aggregate demand/aggregate supply model? A) real wealth B) real Gross Domestic Product (GDP) C) prices D) nominal income ANSWER B
Date: September 2nd, 2020
The horizontal axis for an aggregate demand curve measures A) output of all goods and services measured as a quantity index. B) real Gross Domestic Product (GDP). C) quantity demanded of the representative good. D) disposable personal income. ANSWER B
Date: September 2nd, 2020
According to classical theory, any changes in aggregate demand will A) have no affect on prices or real Gross Domestic Product (GDP). B) lead to changes in both real Gross Domestic Product (GDP) and the price level. C) lead to changes in the price level. D) lead to changes in real Gross Domestic Product (GDP), […]
Date: September 2nd, 2020
Other things being equal, an increase in consumption spending implies A) a decline in saving. B) that economic growth will soon increase. C) a higher standard of living in the future. D) a decline in government spending. ANSWER A
Date: September 2nd, 2020
The difference between savings and saving A) is nonexistent. B) is that savings is measured in real terms while saving is measured in nominal terms. C) is that savings is a stock concept and saving is a flow concept. D) is that savings occurs when consumption does not and saving is used to purchase consumption […]
Date: September 2nd, 2020
The approach to understanding the determination of real GDP and the price level that emphasizes flexible wages and prices and competitive markets is A) the Keynesian model. B) the classical model. C) Adam Smith’s Law. D) the aggregate demand model. ANSWER B
Date: September 2nd, 2020
The sum of all planned expenditures for the entire economy at each possible price level is A) aggregate demand. B) effective demand. C) aggregate supply. D) actual expenditures by consumers. ANSWER A
Date: September 2nd, 2020
Investment is A) spending by businesses on things which can be used to produce goods and services in the future. B) the production of goods for immediate satisfaction. C) the purchasing of stocks and mutual funds. D) goods bought by households. ANSWER A
Date: September 2nd, 2020
