The multiplier effect makes the aggregate demand curve:
A. steeper.
B. horizontal.
C. vertical.
D. flatter.
Answer: D
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Refer to the figure above. If the price of a table is $2, what is John's income?
A) $20 B) $40 C) $60 D) $80
Refer to Figure 7-1. Suppose the government allows imports of leather footwear into the United States. The market price falls to $24. What area represents consumer surplus?
A) R + S B) V + W + X + Y C) R + S + V D) R + S + T + U
The Keynesian AS curve differs from the classical AS curve in that:
a. the classical AS curve assumes flexible nominal wages. b. the Keynesian AS curve is upward sloping. c. the Keynesian AS curve focuses on short-run behavior. d. b and c. e. all of the above.
When a monopoly is created through government franchise,
a. the firm is assured of above-normal profit b. it is subject to government price regulation c. the firm will discontinue any rent-seeking activity d. price discrimination is forbidden e. the government prevents both entry and exit in the long run