Increased household spending reduces aggregate expenditures
a. True
b. False
Indicate whether the statement is true or false
False
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The second half of the 1940s was a period of
A. recession. B. no economic growth. C. very slow economic growth. D. fairly high economic growth.
In the aggregate demand-aggregate supply model, the economy's price level is assumed to be ________.
A. constant, just like in the aggregate expenditures model B. variable, unlike in the aggregate expenditures model C. constant, unlike in the aggregate expenditures model D. variable, just like in the aggregate expenditures model
Suppose that the demand for electricity has been found to be price inelastic. The most likely explanation for this finding is that:
A. few substitutes for electricity exist. B. electricity is sold in a monopoly market. C. electricity is a luxury good. D. the fraction of income spent on electricity is large.
The simple deposit multiplier equals
A. the ratio of the amount of deposits created by banks to the amount of new reserves B. The formula used to calculate the total increase in checking account deposits from an increase in bank reserves C. The inverse, or reciprocal, of the required reserve ratio D. All of the above