The aggregate demand curve is downward sloping because:
a. an increase in the price level will cause an increase in spending.
b. at lower price levels, real wealth decreases, causing a decrease in the quantities of goods and services demanded.
c. at lower price levels, interest rates decrease, causing a decrease in the quantities of goods and services demanded.
d. at lower price levels, exports increase, causing an increase in real GDP.
e. increases in the price level do not affect people's real wealth.
d
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When production generates a negative externality, the true cost of production is the
A) public cost of production. B) private cost of production. C) average cost of production. D) social cost of production.
Consider a country that produces only two goods: bird feeders and binoculars. Suppose it is possible for this country to increase its production of bird feeders without producing fewer binoculars
In this case, its current output combination is inefficient. Indicate whether the statement is true or false
Some economists believe that policy makers should avoid stabilization policy because
a. lags make the policy impact unpredictable. b. no tax cut ever stimulated demand. c. stabilization policies are rarely signed into law. d. it never works.
Which is not a reason the demand curve for loanable funds slopes down?
A. The value of the MRP in terms of today’s money shrinks as the interest rate rises. B. Future returns must be discounted more when the interest rate rises. C. As the interest rate rises, more and more investments become unprofitable. D. Production becomes more profitable in the future, reducing required inputs today.