Aggregate supply can be thought of as
A. a fixed amount of output.
B. unrelated to the price level.
C. a schedule of output at different price levels.
D. the volume of goods at the ends of the production possibilities curve.
Answer: C
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Joe's Taco Hut can purchase a delivery truck for $20,000 and Joe estimates it will generate a net income (after taxes, maintenance and operating costs) of $4,000 per year. His other option is to go to work for someone else earning net income of $3,000 per year. He should:
A. purchase the truck if the real interest rate is less than 5%. B. not purchase the truck if the real interest rate is greater than 1%. C. purchase the truck if the real interest rate is less than 15%. D. purchase the truck if the real interest rate is greater than 5%.
An important determinant of velocity is the rate of interest.
Answer the following statement true (T) or false (F)
The circular flow shows that
A) aggregate production equals aggregate expenditure. B) aggregate expenditure is less than aggregate income. C) GDP equals aggregate income. D) Both answers A and C are correct.
If the demand curve facing a monopoly was 1 unit at $7, 2 units at $6, 3 units at $5, 4 units at $4, and 5 units at $3, at the point along the curve where 3 units are being sold, the elasticity of demand: a. is greater than one
b. is equal to one. c. is less than one. d. cannot be determined from the above information.