According to Keynes, at equilibrium, aggregate demand will always equal each of the following EXCEPT
A. C + I.
B. C + S.
C. full employment GDP.
D. aggregate supply.
C. full employment GDP.
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The tangent at point A on a curve has a positive slope. Therefore, the curve has a
A. positive slope at all points. B. positive slope at point A. C. negative slope at all points. D. negative slope at point A.
The U.S. economy is not a perfectly competitive market. There are costs associated with negotiating contracts, enforcing agreements, taxes and less than perfectly competitive firms. Nevertheless, according to Wallis and North (1986), the U.S
economy has grown in the presence of these transaction costs and these costs have risen sharply as a percentage of GDP between 1890 and 1970. Indicate whether the statement is true or false
One way people cope with uncertainty about the future is they:
A. avoid risks when it is reasonable to do so. B. buy insurance. C. only select risky alternatives if the expected value is twice as high as for a safe alternative. D. All of these are ways individuals cope with uncertainty.
Kim is paid $50,000 per year, and pays an annual income tax of 10 percent. Due to an inflation rate of 10 percent, her pay increases to $55,000, which puts her in a higher tax bracket where she must pay 20 percent. Which of the following can be said of Kim?
A. Inflation caused her to be taxed more heavily and decreased her purchasing power. B. Inflation caused her to be taxed more heavily and increased her purchasing power. C. Her raise reflects the inflation rate, and therefore her purchasing power is unchanged. D. Inflation caused her to be taxed more but didn’t change her purchasing power.