Changes in consumer confidence, business optimism, government spending, and foreign events that cause economic volatility are known as
A) Supply Shocks.
B) Demand Shocks.
C) Aggregate Demands.
D) Real Business Cycles.
B
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The expenditure multiplier concept of the aggregate-expenditures model ________.
A. explains movement up or down the aggregate demand curve B. magnifies the shifts of the aggregate demand curve C. is not at all relevant in the AD/AS model D. reverses the shift of the aggregate demand curve
In the above figure, who pays the larger share of the tax?
A) buyers B) sellers C) Buyers and sellers each pay the same amount of the tax and each pays $10 per compact disc. D) Buyers and sellers each pay the same amount of the tax, but the amount each pays is different than $10 per compact disc.
The ratio of a change in consumption to a change in income is the
a. consumption ratio b. propensities to consume and to income c. average propensity to consume d. average propensity to consume and to save e. marginal propensity to consume
Fixed cost is:
A. the cost of producing one more unit of capital, for example, machinery. B. any cost that does not change when the firm changes its output. C. average cost multiplied by the firm's output. D. usually zero in the short run.