Which of the following best explains why the aggregate expenditure curve gets higher as the price level drops?
a. Purchasing power increases.
b. The economy moves closer to equilibrium.
c. Planned investment decreases.
d. Government purchases are falling.
a. Purchasing power increases.
You might also like to view...
The slope of a consumer’s indifference curve between two commodities represents
A. her marginal rate of substitution between the commodities. B. the relative prices of the goods. C. her marginal revenue from selling the commodities. D. her marginal revenue product from consuming the commodities.
A speculator who believes strongly that interest rates will rise would be likely to
A) buy futures contracts on Treasury bills. B) sell futures contracts on Treasury bills. C) buy Treasury bonds in the spot market. D) increase now the amount of money which he lends.
If the interest rate is 4%, in which of the following cases is the future value the largest?
a. An initial value of $1,000 deposited for 5 years. b. An initial value of $950 deposited for 6 years. c. An initial value of $900 deposited for 7 years. d. An initial value of $850 deposited for 8 years.
Demand shifters do not include the
A. consumer's tastes and preferences. B. the price of the other related goods. C. price of the good. D. consumer's expectations about future prices of the good.