When the aggregate expenditures function of a closed economy is plotted against real GDP, any point on the 45-degree line represents C + I + G = Y, where C = Consumption, I = Investment, G = Government spending, and Y = Real GDP
a. True
b. False
Indicate whether the statement is true or false
True
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The economy pictured in the figure below has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; B B. recessionary; C C. recessionary; A D. expansionary; A
In the short run, if AD increases, the unemployment rate will
A. Rise, and the price level will rise. B. Fall, and the price level will fall. C. Fall, and the price level will rise. D. Rise, and the price level will fall.
Goods that are used up entirely in the production of final goods are known as
A. intermediate goods. B. capital goods. C. durable goods. D. value added goods.
Give examples of the stickiness of prices based on the average number of months between price changes for selected goods and services
What will be an ideal response?