According to Baumol and Blinder, from the demand side, an increase in the price level causes aggregate expenditures to
A. fall, resulting in a lower level of equilibrium income.
B. fall, resulting in a higher level of equilibrium income.
C. rise, resulting in a higher level of equilibrium income.
D. rise, resulting in a lower level of equilibrium income.
Answer: A
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In a model with money neutrality, a 10% increase in the money supply leads to an increase of prices by
A) more than 10%. B) 10%. C) less than 10%, but more than zero. D) zero.
When determining the production possibilities curve
A) the trade-off between the goods in the economy remains constant. B) the amount of productive resources remains constant. C) the prices of the goods are used. D) the prices of resources are used.
Specialty shops can charge and get customers to pay higher prices for identical goods than they would pay in "big box" stores. Assuming that these differences are driven by store appearance rather than differences in services provided, which of the
following best explains this phenomenon? A. Availability heuristics. B. Framing effects. C. Confirmation biases. D. Self-serving biases.
At the beginning of the twenty-first century,
(a) many people returned to living in the Northeast and Midwest. (b) the majority of U.S. citizens lived in rural areas. (c) the majority of people resided in the South and West. (d) all of the above