At every point along the aggregate demand curve, the level of aggregate output demanded is
A) greater than planned aggregate expenditure.
B) less than planned aggregate expenditure.
C) equal to planned aggregate expenditure.
D) unrelated to the concept of planned aggregate expenditure.
Answer: C) equal to planned aggregate expenditure.
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Online music stores such as Apple's iTunes provide an alternative to buying CDs. The introduction of online music stores has shifted:
A. the demand curve of CDs to the right. B. the supply curve of CDs to the left. C. the demand curve of CDs to the left. D. the supply curve of CDs to the right.
Recall the Application about the decrease in price of illegal drugs in the United States to answer the following question(s).Recall the Application. The decrease in price of illegal drugs could be caused by either a(n) ________ in demand or a(n) ________ in supply of the drugs.
A. increase; increase B. increase; decrease C. decrease; increase D. decrease; decrease
Refer to the diagrams for two separate product markets. Assume that society's optimal level of output in each market is Q 0 and that government purposely shifts the market supply curve from S to S 1 in diagram (a) on the left and from S to S 2 in
diagram (b) on the right. The shift of the supply curve from S to S 2 in diagram (b) might be caused by a per-unit:
A. subsidy paid to the producers of this product.
B. tax on the producers of this product.
C. subsidy paid to the buyers of this product.
D. tax on the buyers of this product.
Refer to the diagram for a private closed economy. The $400 level of GDP is:
A. that output at which saving is zero.
B. too high because consumption exceeds investment.
C. unstable because aggregate expenditures exceed GDP.
D. unstable because aggregate expenditures are less than GDP.