Economic income is equal to consumption plus changes in net worth.
Answer the following statement true (T) or false (F)
True
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The amount by which aggregate expenditures exceed those associated with the full-employment level of domestic output can best be described as
A. the multiplier. B. a recessionary expenditure gap. C. the average propensity to save. D. an inflationary expenditure gap.
The above figure shows the U.S. market for 1 carat diamonds. The free trade, the price in the United States for diamonds is equal to ________ and with the quota illustrated in the figure, the price in the United States is equal to ________
A) $2,000; $4,000 B) $2,000; $3,000 C) $4,000; $3,000 D) $4,000; $2,000 E) $2,000; $2,000
If Alberto Reyes increases his work hours when his real wage increases, then
A) the substitution effect of the wage increase outweighs the income effect. B) the income effect of the wage increase outweighs the substitution effect. C) leisure is an inferior good to Alberto. D) the substitution effect of the wage increase is completely offset by the income effect.
Oil prices increased significantly in 2008. According to the Keynesian model, this increase in oil prices should have caused which of the following to occur?
A) demand-pull inflation B) demand-push inflation C) cost-push inflation D) cost-pull inflation