Using a graph, show and explain the difference between an anticipated and an unanticipated increase in aggregate demand
What will be an ideal response?
In the above figure, an unanticipated increase in aggregate demand is shown by moving from A to B, along the short-run aggregate supply curve. An anticipated increase in aggregate demand implies that only the price level increases, and the economy moves from A to C as the short-run supply curve shifts to SRAS2.
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"To calculate GDP, economists begin with total income earned and then subtract total expenditure by the four sectors of the economy." Is the previous sentence true or false? Explain your answer
What will be an ideal response?
Which statement is most likely correct about quantity supplied?
a. When economists refer to quantity supplied, they are referring to a certain point on the supply curve or a certain quantity on the supply schedule. b. When economists refer to quantity supplied, they are referring to the relationship between a range of prices and the quantities supplied at those prices. c. Quantity supplied does not change with price. d. Quantity supplied will increase for one good when the quantity of the other good is increased.
Which of the following scenarios shows an increasing-cost industry?
a. As the demand for cotton shirts drops, the price of cotton suitable for making this product rises. b. As the demand for computers rises, the price of microchips for making this product drops. c. As the demand for raspberries rises, the price of land suitable for growing this crop rises. d. As the demand for wooden rulers drops, the price of lumber for making this product stays constant.
A purpose of advertising is to make the:
A. demand for one's product less inelastic. B. supply for one's product less elastic. C. market closer to perfectly competitive. D. demand for one's product more inelastic.