Which of the follow is not a property of the aggregate demand curve?
A. It shows the relationship between the overall price level and the level of total demand.
B. It shows the price level on the vertical axis and output on the horizontal axis.
C. The aggregate demand curve slopes downward.
D. It shows the relationship between the overall price level and level consumption.
D. It shows the relationship between the overall price level and level consumption.
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Why does the holding of excess reserves by banks and the holding of currency by households and firms cause the real-world deposit multiplier to be less than the simple deposit multiplier?
What will be an ideal response?
How does this graph indicate inelastic demand?
a. The distance between Q1 and Q2 is the same as the distance between P1 and P2.
b. The distance between Q1 and Q2 is less than the distance between P1 and P2.
c. The distance between Q1 and Q2 is slightly more than the distance between P1 and P2.
d. The distance between Q1 and Q2 is much more than the distance between P1 and P2.
The U.S. Secretary of the Treasury met with the Japanese Finance Minister to discuss possible cuts in the Japanese discount rate. The likely outcome of currency speculation in response to this news is that
A. the dollar will depreciate. B. the dollar will appreciate. C. the yen will appreciate. D. both the dollar and yen will appreciate.
Refer to the above figure. Suppose the economy is at E originally, when the dollar increases in value. Which aggregate supply curve applies if the value of real GDP increases?
A. 1 B. 2 C. 4 D. 5