An example of a macroeconomic model is one that considers
a. how the price of chicken influences the quantity of chicken bought.
b. why the size of the total national output depends on the size of total spending.
c. how the output of a product is influenced by the cost of production for the product.
d. All of these.
b. why the size of the total national output depends on the size of total spending.
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If goods X and Y are complements, then the cross price elasticity of demand will be
A) elastic. B) greater than zero but less than 1. C) negative. D) positive.
The unemployment rate can remain below the natural rate, but only _____
a. in the long run b. with continuous deflation c. with a continuously increasing inflation rate d. with a series of adverse supply shocks e. if the money supply is constant
The net result of deflation is to:
A. decrease consumption and investment, decreasing aggregate demand. B. decrease consumption and increase investment, decreasing aggregate demand overall. C. increase consumption and investment, increasing aggregate demand. D. increase consumption and decrease investment, increasing aggregate demand overall.
The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. recessionary gaps. C. exogenous spending. D. expansionary gaps.