Aggregate demand in the economy is equal to
A) Consumption, investment and government spending.
B) Consumption, investment and net exports.
C) Full employment output.
D) None of the above.
Answer: D
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Which of the following factors might make capital mobility less than perfect?
a. Risks due to exchange rate changes b. Differential risk on the assets of different countries c. Technological progress, which improves the quality of information on foreign assets d. both a and b. e. All of the above
Competition results in the efficient product mix because
A) producers are setting MRT equal to minus the price ratio while consumers are setting MRS equal to minus the price ratio ensuring that MRT will equal MRS. B) consumers are on the contract curve. C) the slope of the production possibility frontier will equal the slope of the contract curve. D) the distribution of the final output is Pareto efficient.
In the liquidity trap, the demand curve for investment is horizontal
Indicate whether the statement is true or false
Which of the following goods is directly counted in GDP?
A) the lettuce that Subway purchases for its sandwiches B) the bread that Subway purchases for its sandwiches C) a 12-inch Subway sandwich purchased by a student D) the plastic bags that Subway purchases to wrap its sandwiches