The aggregate demand curve slopes downward because at higher price level
A) the purchasing power of consumers'? assets declines and consumption increases.
B) producers can get more for what they produce, and they increase production.
C) the purchasing power of consumers'? assets declines and consumption decreases.
D) the purchasing power of consumers'? assets increases and consumption increases.
Answer: C) the purchasing power of consumers'? assets declines and consumption decreases.
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Real GDP measures the value of goods and services produced in a given year using
A) base year prices. B) prices of that same year. C) future prices. D) no prices. E) government approved prices.
If firms and workers have adaptive expectations, what impact will contractionary monetary policy have on inflation, unemployment, and the Phillips curve?
What will be an ideal response?
When an economy relies on specialization,
A) the economy will generally produce only one product. B) the economy will usually be heavily agricultural. C) each individual in the economy produces the goods or services for which he or she has relatively the best ability. D) each individual will be assigned by the government to produce that good or service the government believes the economy should specialize in.
Active macroeconomic policy would move to close an expansionary gap by decreasing aggregate demand
a. True b. False Indicate whether the statement is true or false