The circular flow shows that
A) aggregate production equals aggregate expenditure.
B) aggregate expenditure is less than aggregate income.
C) GDP equals aggregate income.
D) Both answers A and C are correct.
D
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The slope of the consumption function
A. equals 1. B. is horizontal. C. equals the MPC. D. is vertical.
According to the budget line in the above figure, which of the following combinations is unaffordable?
A) 1 pizza and 3 CDs B) 3 pizzas and 2 CDs C) 2 pizzas and 4 CDs D) All of the above are affordable.
The highest annual inflation rate experienced in the United States during the past 50 years has been around
a. 3 percent b. 9 percent c. 14 percent d. 27 percent e. 1,000 percent
Which of the following will, unambiguously, decrease the price level?
A. an increase in government spending and a decrease in the Z factors B. a decrease in government spending and an increase in the Z factors C. a decrease in government spending and a decrease in the Z factors D. an increase in government spending and an increase in the Z factors