For an economy, aggregate demand equals:
A. consumption plus investment plus government spending plus exports.
B. consumption plus investment plus government spending plus (exports minus imports).
C. consumption plus investment plus (taxes minus transfers) plus (exports minus imports).
D. consumption plus investment plus government spending plus (imports minus exports).
Answer: B
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Lower real income ________ the demand for money and a lower price level ________ the demand for money.
A. decreases; decreases B. increases; increases C. increases; does not change D. increases; decreases
Refer to Figure 3-2. An increase in price of inputs would be represented by a movement from
A) A to B. B) B to A. C) S1 to S2. D) S2 to S1.
The 2008 financial crisis was caused by the decline of real estate values as well as several other factors
a. True b. False Indicate whether the statement is true or false
If the price of cotton increases
a. consumers will buy more cotton clothes. b. consumers will increase their purchases of clothing made of other materials. c. clothing producers will stop making cotton clothes. d. clothing producers will not be able to adjust their output.