As the price level rises, people feel wealthier and aggregate demand increases
Indicate whether the statement is true or false
F
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According to the quantity theory of money:
a. the velocity of money is highly variable. b. the money supply directly affects real GDP. c. the money supply inversely affects velocity. d. real GDP increases as the price level increases. e. P = MV/Q.
Over the course of the business cycle, most firms respond
a) to negative shocks by cutting wages b) to positive shocks by raising prices c) to negative shocks by cutting prices d) to positive shocks by raising output e) all of the above
What are the three sources of economic scale
What will be an ideal response?
Consider a Stackelberg duopoly with the following inverse demand function: P = 100 ? 2Q1 ? 2Q2. The firms' marginal costs are identical and are given by MCi = 2. Based on this information, the Stackelberg leader's marginal revenue function is:
A. MR(QL) = 50 ? 2QL + c1/2. B. MR(QL) = 50 ? 2QL + c2/2. C. MR(QF) = 100 ? QF + c2/2. D. MR(QF) = 100 ? 2QF + c1/2.