If planned investment is greater than actual investment, then aggregate expenditure is less than GDP
Indicate whether the statement is true or false
FALSE
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The democratic political process is weighted in a manner that favors
A) contractionary over expansionary fiscal and monetary policies because changes in aggregate demand tend to affect output before they affect the price level. B) contractionary over expansionary fiscal and monetary policies because changes in aggregate demand tend to affect the price level before they affect output. C) expansionary over contractionary policies because changes in aggregate demand tend to affect output before they affect the price level. D) expansionary over contractionary policies because changes in aggregate demand tend to affect the price level before they affect output.
_____ is an example of human specificity which raises the risks associated with opportunism
a. Car insurance purchased by an individual for his/her favorite car. b. Investment of an employer in company-specific skills. c. Purchasing immovable machines for a particular facility. d. Investment in research and development
?A short-run aggregate supply curve (SRAS) assumes:
A. ?the CPI is fixed. B. ?each point on the SRAS is potential real GDP. C. fixed or sticky nominal wages. D. ?nominal wages vary directly with price changes.
Stuart tells his student government representative at his college to propose rent controls on local rental housing as a way to help students afford rental housing. Maria disagrees with Stuart, saying rent controls will make students worse off. Who is correct and why?Economic theory suggests that this policy would harm students as a whole despite the fact that some students who are able to find housing at the reduced price would benefit. Which of the following are some of the offsetting secondary effects of the rent controls that would work to the disadvantage of students?
A. Stuart is correct. All students will be better off with a lower price of rental housing. B. Maria is correct. All students will be worse off with a shortage of rental housing. C. Neither are correct. Imposing rent controls will have no effect on the rental housing market. D. Both are correct in part. Rent controls will be better for the students who are able to find housing at the reduced price but worse for students as a whole because there will be a shortage of rental housing, a lower future supply, and the quality will deteriorate.