The approach to understanding the determination of real GDP and the price level that emphasizes flexible wages and prices and competitive markets is
A) the Keynesian model. B) the classical model.
C) Adam Smith's Law. D) the aggregate demand model.
B
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Refer to the scenario above. Which of the following is true?
A) Both the workers should specialize in the production of Good Y. B) Worker 1 should produce Good Y and Worker should produce Good X. C) Worker 1 should produce Good X and Worker should produce Good Y. D) Both the workers should specialize in the production of Good X.
Economics is the social science that studies
A) the real reasons people buy goods and services. B) the psychology of individuals and businesses. C) whether a nation has enough natural resources. D) how people make choices to cope with scarcity. E) how choices made in the social interest could eliminate scarcity.
Fiscal policy is policy aimed at controlling undesired fluctuations in overall spending through changes in
A) government expenditures and taxes. B) government subsidies to marginal business firms. C) interest rates. D) methods of making seasonal adjustments. E) price and wage regulation.
The four components of aggregate demand include all of the following except
A. Saving. B. Net exports. C. Investment. D. Consumption.