In the Keynesian aggregate expenditures model, "aggregate expenditures" refer to:
a. the amount of GDP that could be produced if unemployment were zero.
b. the combined expenditures of consumers, businesses, governments, and foreigners (net exports).
c. the amount of demand for consumer goods that would arise if all citizens had all the income they wanted.
d. consumer spending measured in constant prices.
b
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If firms are more pessimistic and believe that future profits will fall and remain weak for the next few years, then
A) investment spending will remain unaffected. B) investment spending will rise and then fall. C) investment spending will rise. D) investment spending will fall.
Andrea Schwatz has argued that the Great Depression was caused by
a. the fall in the stock of money. b. the fall in consumer durable spending. c. the fall in investment spending. d. the increase in nominal wages.
Which of the following statements is correct?
a. In order to calculate the inflation rate for the year 2011, we need to know the values of the consumer price index for the years 2009, 2010, and 2011. b. Changes in the consumer price index are often thought to be useful in predicting changes in the producer price index. c. Despite its name, the "consumer price index" really measures the overall cost of the goods and services bought by consumers, business firms, and units of government. d. If the prices of all goods and services changed proportionately over time, then the consumer price index would reflect no substitution bias.
According to classical macroeconomic theory, changes in the money supply affect
a. nominal variables and real variables. b. nominal variables, but not real variables. c. real variables, but not nominal variables. d. neither nominal nor real variables.