A production function relates
a. the level of output to the level of technology.
b. the price level to the level of aggregate output.
c. aggregate output to the level of inputs and technology.
d. aggregate demand to aggregate supply.
C
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When a central bank sells bonds, cash reserves throughout the financial system increase, interest rates fall, and investment spending increases
Indicate whether the statement is true or false
Which of the following bonds would you prefer to be buying?
A) a $10,000 face-value security with a 10 percent coupon selling for $9,000 B) a $10,000 face-value security with a 7 percent coupon selling for $10,000 C) a $10,000 face-value security with a 9 percent coupon selling for $10,000 D) a $10,000 face-value security with a 10 percent coupon selling for $10,000
Exhibit 14-7 Aggregate supply and demand curves
?
In Exhibit 14-7, if aggregate demand increases from AD1 to AD2,
A. output and prices will increase. B. output and prices will decrease. C. output alone will increase. D. prices alone will increase.
Given an aggregate supply curve, a decrease in aggregate demand will: a. increase the real interest rate
b. increase real GDP. c. increase the price level. d. decrease the real exchange rate. e. decrease real GDP.