The supply and demand model examines how prices and quantities are determined
A. by governments.
B. by monopolists.
C. in markets.
D. by churches.
Answer: C
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During crisis periods, such as major snowstorms, the prices of basic goods, such as bread and milk rise. The price increases are clear evidence of
A) price gouging. B) government regulation. C) the market making it possible for the people who place the highest monetary value on bread and milk get bread and milk. D) corruption.
Assume that there is a $20 billion increase in government purchases. If MPC = 0.8, the sum of the indirect effect on aggregate demand through induced additional consumption purchases is equal to: a. $16 billion
b. $20 billion. c. $80 billion. d. $100 billion.
The aggregate demand curve shows the quantity of domestic product
a. produced at each possible price level. b. demanded and produced at each possible price level. c. that is exported at each possible price level. d. demanded at each possible price level.
In their 1960 article, Paul Samuelson and Robert Solow found
A) a direct relationship between inflation and investment expenditures. B) an inverse relationship between inflation and investment expenditures. C) a direct relationship between inflation and unemployment. D) an inverse relationship between inflation and unemployment.