What is the effect on the aggregate demand curve from an increase in the price level? In particular, does the aggregate demand curve shift leftward or rightward?
What will be an ideal response?
When the price level increases, there is a movement along the aggregate demand curve. The quantity of real GDP demanded decreases in response to an increase in the price level. However, the aggregate demand curve does not shift.
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Politicians often highlight the plight of a single individual as a reason to support a particular project or agenda. In this case, politicians are using
A) the Khaneman effect. B) the Allais effect. C) framing. D) prospect theory.
Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and real GDP in the context of the Three-Sector-Model?
a. The real risk-free interest rate rises and real GDP rises. b. The real risk-free interest rate falls, and real GDP rises. c. The real risk-free interest rate rises, and real GDP falls. d. The real risk-free interest rate and real GDP remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
"In 2008, air travel decreased substantially despite significant reductions in ticket prices." If this information is correct, it indicates that the law of demand did not apply to air travel in 2008.
a. true b. false
Refer to the information below. It is clear that diminishing returns sets in after ________ workers per day.Number ofWorkers Per DayOutputPer Day0011328315424532639
A. 3 B. 4 C. 5 D. 6