An increase in the price level in the aggregate expenditures model would:
A. Decrease aggregate expenditures and shift the AD curve to the left
B. Increase aggregate expenditures and shift the AD curve to the right
C. Decrease aggregate expenditures but would not shift the AD curve
D. Increase aggregate expenditures but would not shift the AD curve
C. Decrease aggregate expenditures but would not shift the AD curve
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If the U.S. government decides to increase military spending, a possible opportunity cost could be lower spending on education.
Answer the following statement true (T) or false (F)
Demand-pull inflationary pressure increases as the economy approaches full employment
a. True b. False Indicate whether the statement is true or false
Efficiency wages do not lead to:
A. structural unemployment. B. wages above their equilibrium level. C. lower firm profits. D. increased worker productivity.
Which of the following statements is true?
A. Specialization and trade along the lines of comparative advantage allows nations to consume more than if they were to produce just for themselves. B. Free trade theory suggests that when trade takes place any gains made by one nation comes at the expense of another. C. According to the theory of comparative advantage, a nation should specialize in the production of those goods for which it has an absolute advantage. D. One country can have the comparative advantage in both goods, but it can only have the absolute advantage in one good as long as the opportunity costs are different.