The shape of the aggregate demand curve does NOT tell us anything about how the total dollar value of spending will ultimately be divided between output and prices. For this we need
A. information about the standard of living in the country.
B. to know how far from the origin the aggregate demand curve is.
C. an aggregate supply curve.
D. information that only the Consumers' Price Index can provide.
Answer: C
You might also like to view...
Refer to Table 4-8. Suppose that the quantity of labor demanded decreases by 40,000 at each wage level. What are the new free market equilibrium hourly wage and the new equilibrium quantity of labor?
A) W = $10.00; Q = 390,000 B) W = $8.50; Q = 340,000 C) W = $9.50; Q = 380,000 D) W = $8.00; Q = 350,000
U.S. automobile manufacturers chose not to switch to producing subcompact cars for which of the following reasons?
(a) They did not perceive the U.S. demand for subcompacts as permanent. (b) This switch was not economically feasible in the long run. (c) Government policy prevented them from doing so. (d) All of the above.
If a monopolist's marginal cost equals its marginal revenue
A. output should be raised. B. output should be reduced. C. production is at its most efficient level. D. profits are maximized or losses are minimized.
What happens when wages are set by law above the equilibrium level?
a. Firms employ fewer workers than they would at the equilibrium wage. b. Firms employ more workers than they would at the equilibrium wage. c. Firms tend to try to break the law and hire people at the equilibrium level. d. Firms hire more workers but for fewer hours than they would at the equilibrium wage.