Which of the following is an underlying assumption of the aggregate expenditure model?
a. Everyone shares equally in profits when income exceeds the cost of producing goods and services.
b. The economy does better when income exceeds expenditure.
c. Equilibrium is a hypothetical state that can never be reached.
d. If there were no output in the economy, then there would be no income.
d. If there were no output in the economy, then there would be no income.
You might also like to view...
Which of the following statements is true when wages are above the market clearing wage?
A) The larger the gap between the current market wage and the market clearing wage, greater will be the amount of unemployment. B) At wage rates above the market clearing wage rate, there is an excess demand for workers. C) At wage rates below the market clearing wage rate, there is an excess supply of workers. D) The larger the gap between the current market wage and the market clearing wage, smaller will be the amount of unemployment.
The open-economy multiplier is equal to the reciprocal of the marginal propensity to save
Indicate whether the statement is true or false
Instruments which provide payments to holders of bonds in the event of default are known as ________
A) collateralized bond obligations B) tertiary payment devices C) credit default swaps D) mortgage-backed securities
Globalization is the exchange of ________________ among countries.
A. goods, services, ideas, and people B. money and other financial assets C. communications D. workers and jobs