Using Figure 2 below, suppose that the economy started at PAE2. A potential change that could cause the economy to go from PAE2 to PAE3 might be:
A. wealth level increases.
B. interest rates increase.
C. taxes increase.
D. domestic income increases.
A. wealth level increases.
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In the aggregate expenditures diagram, the 45° line represents the equilibrium condition that
A. Y* = Y. B. AE = C + I + G + NX. C. I = C. D. Y = AE.
Nonexcludability causes:
A. people to demand a higher quantity than they would if they had to pay for what they consumed. B. people to demand a lower quantity than they would if they paid for what they consumed. C. firms to supply a lower quantity than they would if they incurred the full costs of the provision of the good. D. firms to supply a higher quantity than they would if they had to pay for what they supplied.
Normal profit and the cost of capital are the same concept
Indicate whether the statement is true or false
Paper money in the United States is
A. backed by gold in Fort Knox. B. partially backed by gold and silver. C. entirely fiat money. D. fully convertible into gold at fixed prices.