Changes in aggregate demand
A) could be caused by changes in the spending decisions of the households, businesses, the government, and foreigners.
B) are very uncommon.
C) are unlikely to change quickly in response to economic events.
D) are primarily based on changes in firms' abilities to produce products.
E) are not affected by changes in government policies.
A
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The income elasticity of demand for food is roughly 1. A consumer's monthly income is $2,000, of which 20% is spent on food. If the income of this consumer doubles, the amount she'll spend on food will be
A. $800 per month. B. $1,000 per month. C. $500 per month. D. $400 per month.
Distinguish between investment goods and consumption goods. If you buy a car, is it investment or consumption? What if IBM buys a car? Are inventories a consumption or investment good?
What will be an ideal response?
Entrepreneurs can delegate every one of the following tasks to labor except:
a. hiring and training new employees. b. assuming business risk and uncertainty. c. supervision of the production process. d. researching ideas for new products. e. marketing the goods and services produced.
A world-renowned brain surgeon can type twice as fast as her secretarial assistant. Which of the following statements is true in this situation?
a. The secretary has an absolute advantage in typing. b. The surgeon should do her own typing to save money. c. The surgeon should fire the assistant and work weekends and evenings to stay up on her typing. d. The surgeon should spend her time doing brain surgery and allow her secretary to do the typing because the secretary has a comparative advantage in typing. e. The surgeon should spend her time doing brain surgery and allow her secretary to do the typing because the surgeon has a comparative advantage in typing.