In the simple Keynesian model, equilibrium aggregate output is determined by
A) aggregate demand.
B) aggregate supply.
C) the national demand for labor.
D) the price level.
A
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Price elasticity of demand measures
A) how responsive sales are to a change in buyers' incomes. B) how responsive quantity demanded is to a change in price. C) how responsive sales are to changes in the price of a related good. D) how responsive suppliers are to price changes.
Which of the following about fiscal policy is true?
a. Modern forecasting methods make it relatively easy to time fiscal policy changes in a manner that will help stabilize the economy. b. Legislative action is necessary if automatic stabilizers are going to smooth the ups and downs of the business cycle. c. Proper timing of changes in discretionary fiscal policy is both crucially important and difficult to achieve. d. Both the crowding-out and new classical theories indicate that expansionary fiscal policy will exert a powerful impact on aggregate demand.
Refer to the information provided in Figure 16.2 below to answer the question(s) that follow.
Figure 16.2Refer to Figure 16.2. The ________ imposed as a result of producing cars is $10.00 per car.
A. marginal private cost B. marginal damage cost C. total cost D. marginal social cost
If a society is producing at a point along its production possibility frontier, then the society
A. is underallocating resources so it must be inefficient. B. is fully employing its resources so it must be achieving output efficiency. C. is fully employing its resources, but not necessarily achieving output efficiency. D. is overallocating resources so efficiency is indeterminate.