The aggregate demand curve slopes downward indicating that:
A. an increase in the general price level will reduce the aggregate quantity of goods and services demanded.
B. an increase in the general price level will increase the aggregate quantity of goods and services demanded.
C. a change in the interest rate will alter the aggregate quantity of goods and services demanded.
D. consumers substitute between domestic-made and foreign-made goods as their relative prices change.
Answer: A
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At any wage rate, the quantity of welders willing to work is less than the quantity of tomato pickers. Why?
What will be an ideal response?
When interest rates fall
a. firms want to borrow more for new plants and equipment and households want to borrow more for homebuilding. b. firms want to borrow more for new plants and equipment and households want to borrow less for homebuilding. c. firms want to borrow less for new plants and equipment and households want to borrow more for homebuilding. d. firms want to borrow less for new plants and equipment and households want to borrow less for homebuilding.
Which of the following raises domestic prices when demand is relatively high?
A. Lump sum tariff B. Domestic subsidies C. Lump sum tariff and excise tariff D. Excise tariff
“Crowding-out” refers to the process by which
A. high consumption leads to low saving and investment. B. the Fed prevents “runs” on banks. C. Fed sales of bonds reduce the ability of corporations to buy bonds. D. increased government spending raises interest rates, thus lowering investment spending.