A decrease in the price level makes consumers feel wealthier, so they purchase more. This logic helps explain why the aggregate-demand curve
a) is vertical.
b) slopes upward.
c) is horizontal.
d) slopes downward.
Ans: d) slopes downward.
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The sum total of a nation's net trade, i.e., its exports minus imports in a given year, defines its _________.
A. economies of scale B. economic globalization C. balance of trade D. comparative advantage E. trade surplus
If the marginal propensity to save (MPS) is 0.25, the value of the spending multiplier is:
a. 1. b. 2. c. 4. d. 9.
If the economy is represented in the graph shown and is currently at point E1, then the economy must be in:
A. long-run equilibrium. B. a recession. C. an economic boom. D. an economic recovery.
Grace is headed to work at a catering business as a waitress for $100. Her sister Paige calls and asks her to go horseback riding instead. Grace decides to go to work, which implies Grace's opportunity cost of working is:
A. less than $100. B. equal to $100. C. no more than $100. D. greater than $100.