If aggregate demand shifts right, then eventually price level expectations rise. This increase in price level expectations causes the aggregate demand curve to shift to the left back to its original position
a. True
b. False
Indicate whether the statement is true or false
False
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Critically evaluate the following statement. "The presence of risk and uncertainty poses a problem for the workings of the market."
What will be an ideal response?
A recent medical study shows that peanuts are one of the leading causes of high cholesterol. This would cause the demand for peanuts to
a. Shift to the left b. Shift to the right c. go down the demand curve d. not change
The Fed's low short-term interest rate policy from 2002-2004, along with housing regulations promoting low down-payment loans to sub-prime borrowers, encouraged
a. conventional 30-year, fixed rate mortgages which have relatively high default and foreclosure rates. b. conventional 30-year, fixed rate mortgages which have relatively low default and foreclosure rates. c. adjustable rate mortgages which have relatively low default and foreclosure rates. d. adjustable rate mortgages which have relatively high default and foreclosure rates.
Compute the value of the simple spending multiplier if the marginal propensity to consume (MPC) is 0.80
a. 8 b. 5 c. 2 d. 0.80