In the classical model, an increase in aggregate demand will lead to an increase in wage rates while a decrease in aggregate demand will
A) change the price of capital.
B) leave wages unchanged since workers will not take a cut in pay.
C) increase wages since business will be desperate for labor.
D) decrease wages.
D
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When China builds a dam using few machines and a great deal of labor, it is answering the ________ part of one of the two big economic questions
A) "what" B) "how" C) "where" D) "for whom"
If the costs of production do not change as output increases in the long run in a perfectly competitive industry, then this is a
A) constant-return-to-scale industry. B) constant-competitive industry. C) constant-cost industry. D) constant-price industry.
In the simple aggregate expenditure model, the slope of the aggregate expenditure line depends on: a. interest rates
b. real gross domestic product. c. the price level. d. the marginal propensity to consume. e. the marginal propensity to save.
Use the following graph to answer the next question.
In the above graph it is assumed that investment, net exports, and government expenditures
A. vary inversely with real GDP. B. are all increasing. C. vary directly with real GDP. D. are independent of real GDP.