In the Keynesian aggregate expenditure graph (Figure 5-5), the 45 degree line is meant to indicate that:
a. planned aggregate expenditure always equals aggregate income.
b. savings must equal investment.
c. actual aggregate expenditure must equal aggregate income.
d. actual income must equal planned income.
e. none of the above.
C
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An increase in the value of a domestic currency in terms of other currencies is known as
A) an appreciation. B) a depreciation. C) a flexible exchange rate. D) a term not given in the above answers.
When the economy enters a prosperity phase, personal income tax collections
a. fall along with consumption and real GDP b. rise along with real GDP but unemployment insurance payments to workers fall c. rise but real GDP and unemployment insurance payments to workers fall d. fall along with real GDP but unemployment insurance payments to workers rise e. fall causing real incomes and employment to fall
Consumer surplus
a. is the difference between total willingness to pay and the total amount actually paid. b. guarantees that the market value of a good in money is equal to the total economic value of the good. c. is always negative because of diminishing marginal utility. d. is the total area under a consumer's demand curve.
If a hurricane were to wipe out the majority of the eastern seaboard in the United States:
A. neither the short-run nor long-run aggregate supply curves would be affected. B. only the long-run aggregate supply curve would shift left. C. only the short-run aggregate supply curve would shift left. D. the long-run and short-run aggregate supply curves would both shift left.