Distinguish between a change in demand and a change in quantity demanded
What will be an ideal response?
A change in quantity demanded is caused by a change in the price of the good. It is a movement along the demand curve, so that an increase in price leads to a decrease in quantity demanded. A change in demand refers to a shift of the demand curve. The amount demanded changes at every price. Changes in income, population, prices of related goods, tastes and preferences, and expectations about the future cause the demand curve to shift either to the right or to the left.
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An increase in the money supply is likely to reduce
A. money demand. B. interest rates. C. the general price level. D. nominal income.
Over the last twenty years, real GDP in the U.S. economy has increased and there has been inflation. This indicates that
A) aggregate demand has been constant while aggregate supply has increased. B) aggregate demand has increased more than aggregate supply. C) aggregate demand has increased while aggregate supply has been constant. D) aggregate demand has increased less than aggregate supply.
Joe's income is $500, the price of food (F, y-axis) is $2 per unit, and the price of shelter (S, x-axis) is $100. Which of the following represents his budget constraint?
A) 500 = 2F + 100S B) F = 250 - 50S C) S = 5 - .02F D) All of the above.
If output is falling and unemployment is rising, the economy must be in a(n)
A. depression. B. contraction. C. expansion. D. hyperinflationary period.