The aggregate demand curve is:
A. vertical under conditions of full employment.
B. horizontal when there is considerable unemployment in the economy.
C. downsloping because of the interest-rate, real-balances, and foreign purchases effects.
D. downsloping because production costs decrease as real output rises.
C. downsloping because of the interest-rate, real-balances, and foreign purchases effects
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A market has four individuals, each considering buying a grill for his backyard. Assume that grills come in only one size and model. Abe considers himself a grill-master, and finds a grill a necessity, so he is willing to pay $400 for a grill. Butch is a meat-lover, honing his grilling skills, and is willing to pay $350 for a grill. Collin just met the girl of his dreams, and she loves a good grilled steak, so in his effort to impress her he is willing to pay $320 for a grill. Daniel loves grilled shrimp and thinks it might be cheaper in the long run if he buys a grill instead of eating out every time he wants grilled shrimp, so he is willing to pay $200 for a grill.
If the market price of grills increases from $310 to $350, given the scenario described: A. total consumer surplus would fall by $120. B. total consumer surplus would fall by $90. C. Collin and Butch would experience a decrease in consumer surplus, but Abe's consumer surplus would rise. D. Collin would experience a decrease in consumer surplus, but Abe and Butch would experience a rise in consumer surplus.
Measuring the national income accounts can NOT be helpful in explaining things like:
A. unemployment rates. B. economic booms. C. rates of inflation D. rates of return on a firm’s capital.
In a competitive economy, the questions of what, how, and for whom to produce tend to be regulated by
A. the government. B. businessmen. C. the price system. D. workers.
Tariffs contribute to higher prices of textile products imported into the United States, but import quotas on textiles brought into the United States do not
a. True b. False Indicate whether the statement is true or false