The distinguishing feature that determines whether an analysis is classical or Keynesian is
A. the speed of price adjustment.
B. the slope of the aggregate demand curve.
C. the assumption about the transmission mechanism of monetary policy.
D. the degree of monopoly power in the economy.
Answer: A
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Each of the HPAE promoted manufactured exports
Indicate whether the statement is true or false
Assume the aggregate demand curve intersects the aggregate supply curve in its intermediate range. A decrease in the aggregate supply curve will
A. increase the price level and decrease real GDP. B. decrease the price level and increase real GDP. C. increase both the price level and real GDP. D. decrease both the price level and real GDP.
The 45-degree line in the Keynesian income-expenditure graph indicates
a. the basic size of the spending flow. b. points where total output is equal to aggregate expenditure. c. the size of the multiplier. d. the size of the marginal propensity to save.
In perfect competition,
a. there are typically two or three equally powerful firms b. a large number of sellers offer a differentiated product c. the firm is a price taker d. marginal revenue cannot be calculated because the firm's demand is perfectly elastic e. the market demand and the firm's demand are perfectly elastic