What causes the aggregate demand curve to shift?
What will be an ideal response?
Anything that causes total planned real expenditures on domestic goods to increase or decrease, other than changes in the price level, causes the curve to shift. These include things like changes in the exchange rate, changes in economic conditions in other countries, changes in the real interest rate (not associated with price level changes), and a change in the amount of money in circulation.
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In the monetarist view
A. inappropriate monetary policy is a major source of macroeconomic instability. B. adverse aggregate supply shocks are a major source of macroeconomic instability. C. changes in investment spending are a major source of macroeconomic instability. D. the fact that prices and wages are flexible is a major source of macroeconomic instability.
Lindahl prices for collective consumption goods are _____
a. are sufficient to achieve political agreement on the optimal level of output b. are necessary to achieve political agreement on the optimal level of output c. are sufficient for economic efficiency d. are necessary for economic efficiency
You decide to lend $100 to a friend interest free for one year. You calculate that you could have earned 10% interest. What is the opportunity cost of the loan if it is paid on time?
A. $100 B. $10 C. $0 D. $110
Refer to the data. Suppose the price of new product Z is $10 rather than $1. This consumer would purchase:
Consumer's income = $12
A. some of Z but not as much as if the price were $1.
B. none of Z.
C. less of X, Y, and Z than if the price were $1.
D. more of X, Y, and Z than if the price were $1.