Which of the following alone can explain the change in the price level and output during World War II?
a. aggregate demand shifted right
b. aggregate demand shifted left
c. aggregate supply shifted right
d. aggregate supply shifted left
a
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Because we cannot observe or measure utility
A) the predictions of marginal utility theory cannot be verified. B) marginal utility theory is incomplete and so its predictions might not be valid. C) marginal utility theory must be derived from assumptions about demand curves because demand curves can be measured. D) None of the above answers are correct.
If two interdependent economies work independently pursuing the best interests of their own economies
A) both countries can end up worse than they planned because of international externalities. B) they will make other economies more vulnerable to international externalities. C) they will have to sacrifice their monetary autonomy to achieve their goals. D) both countries can end up worse than they planned because of the liquidity effect.
The "trickle down" theory is based on the notion of multiplier effects
Indicate whether the statement is true or false
A lower marginal propensity to consume is most likely to result in a(n): a. flatter aggregate expenditure line
b. steeper aggregate expenditure line. c. upward shift of the aggregate expenditure line. d. downward shift of the aggregate expenditure line.