Within the framework of the AD-AS model, an increase in savings by households will
a. increase the supply of loanable funds and reduce interest rates.
b. be offset by a decrease in savings by businesses.
c. cause long-run fluctuations in the rate of consumption.
d. result in a decline in aggregate demand, output, and employment.
A
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Suppose you see a 2006 Scion xB Sport Wagon advertised in the local newspaper for $8,500. If you knew the car was reliable, you would be willing to pay $10,000 for it
If you knew the car was unreliable, you would only be willing to pay $5,500 for it. Under what circumstances should you buy the car?
(Refer to the figure provided in the text.) For the share of income spent on food to remain constant as income rises, the Engel curve must
a. lie above the 45-degree line. b. lie below the 45-degree line. c. be equal to the 45-degree line. d. bisect the 45-degree line.
Capital widening refers to an increase in the amount of capital per worker, either human capital per worker, in the form of higher education or skills, or physical capital per worker.
Select whether the statement is true or false. A. True B. False
Currently you purchase ten frozen pizza per month. You will graduate from college in December, and you will start a new job in January. You have no plans to purchase frozen pizzas in January. For you, frozen pizzas are a(n)
a. substitute good. b. normal good. c. inferior good. d. complementary good.