Which of the following does the aggregate expenditure model help explain?
a. price-level changes
b. stagflation
c. shifts in the aggregate supply curve
d. short-run business cycles
d. short-run business cycles
You might also like to view...
Which one of the following is least likely to influence the investment choices of decision makers?
a. the pure interest yield b. the expectation of profit c. the risk associated with the investment d. the general level of prices
The experience of the Volcker disinflation of the early 1980s
a. generally increased estimates of the sacrifice ratio. b. generally decreased estimates of the sacrifice ratio. c. clearly refuted the predictions of the proponents of rational expectations. d. clearly refuted the predictions of the opponents of rational expectations.
An increase in interest rates is likely to cause
A) firms and households to increase the quantity of money demanded. B) firms and households to decrease the quantity of money demanded. C) the money demand curve to shift to the right. D) the money demand curve to shift to the left.
Exhibit 5-8 GDP data (billions of dollars) Personal consumption expenditures$850 Interest90 Corporate profits150 Government spending400 Depreciation100 Rental income70 Gross private domestic investment120 Compensation of employees830 Exports120 Imports70 Indirect business taxes80 Proprietors' income120 Personal income taxes110 Social Security taxes50 Transfer payments160 In Exhibit 5-8, and using the expenditures approach, gross domestic product (GDP) equals:
A. $1,420 billion. B. $2,460 billion. C. $2,430 billion. D. $1,450 billion.