Contractionary fiscal policy should be used if:
A) aggregate demand-aggregate supply equilibrium is below potential output.
B) aggregate demand-aggregate supply equilibrium is above potential output.
C) aggregate demand-aggregate supply equilibrium is equal to potential output.
D) none of the above.
B
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A) is used to calculate the value of nominal GDP B) values the quantities produced in a year at the prices of the base year C) shows that real GDP increases every year D) uses the prices of two adjacent years to calculate the real GDP growth rate
Households ________ final goods and services in the ________ market
A) purchase; product B) purchase; factor C) sell; factor D) sell; product
Show graphically the effect of technological advance on the price of music downloads. In a separate graph show what happens to the price of CDs as a secondary effect of the new download technology
In a market economy:
A. businesses design their plans to maximize their profit and the market is relied upon to see that individual self-interest is consistent with society's interest. B. workers are directed by government planning boards to produce what is in society's best interest. C. government owns the means of production so that it can produce what is in society's best interest. D. government sets prices to make necessities affordable because it is in society's best interest to make necessities affordable.