The aggregate demand curve:
A. is upsloping because a higher price level is necessary to make production profitable as
production costs rise.
B. is downsloping because production costs decline as real output increases.
C. shows the amount of expenditures required to induce the production of each possible level
of real output.
D. shows the amount of real output that will be purchased at each possible price level.
D. shows the amount of real output that will be purchased at each possible price level.
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The investment demand curve indicates that there is a(n):
A. positive relationship between the real interest rates and the level of investment spending, all other things equal. B. inverse relationship between the real interest rates and the level of investment spending, all other things equal. C. inverse relationship between the determinants of investment and the level of investment spending, holding interest rates constant. D. direct relationship between the real interest rates and the level of investment spending, all other things equal.
"The price elasticity of demand for a particular good is smaller in the long run because consumers adapt to higher prices over time." Do you agree or disagree? Explain
What will be an ideal response?
The price feedback effect explains how an increase in the price level in one country can drive up prices in other countries, which, in turn, further increases the price level in the first country.
Answer the following statement true (T) or false (F)
If the United States, at the point where it is currently producing, must give up the production of 500 bicycles (B) to produce 20 additional tractors (T) with the same resources, the opportunity cost of producing 5 tractors is _______ bicycles.
A) 5 B) 20 C) 100 D) 125