The simple aggregate expenditure model assumes that ______.
a. supply automatically creates demand
b. investment fluctuations are unimportant
c. the price level is stable in the short run
d. consumption patterns are irrelevant
c. the price level is stable in the short run
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In the above figure, if the quantity is equal to 500,000 units, the deadweight loss is equal to
A) area C. B) area D + area I. C) area B + area F. D) area G + area H. E) None of the above answers is correct because the deadweight loss is equal to zero.
A market structure in which many firms are selling an identical product is called
A) perfect competition. B) monopolistic competition. C) oligopoly. D) monopoly.
A noncooperative game situation may occur when
A) firms collude. B) firms find collusion too costly. C) firms merge. D) firms agree to price fixing.
A household's quantity of money demanded is defined as
a. the amount of income that the household chooses to hold in the form of money, at each possible interest rate b. the amount of wealth that the household chooses to hold as money, rather than as other assets c. the household's desire to have greater financial wealth d. the percentage of each dollar of income that the household wishes to spend e. the total amount the household decides to hold in cash, bonds, and other assets, at each possible interest rate