Assume the economy is at point D. If RGDP demanded increased to $17 trillion, how would AE2 shift?
a. It would shift above AE2.
b. It would shift below AE2 but remain above AE1.
c. It would shift below AE1.
d. It would not change.
a. It would shift above AE2.
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Assuming that C + I + G > C + Ir + G, then
a. aggregate demand exceeds than output. b. unplanned inventories are negative. c. there is an unintended inventory accumulation. d. Both a and c e. None of the above
The classical economists argued that the production of goods and services (supply) generates an equal amount of total income and, in turn, total spending. This theory is called:
a. Keynes' General Theory. b. Say's Law. c. the "animal spirits" theory. d. the law of autonomous consumption.
Suppose that the cross price elasticity of demand between good A and good B is -1.2. This indicates that the two goods are
A. complements. B. substitutes. C. both inferior. D. completely unrelated in the minds of consumers.
A major cost of unemployment is lost production
a. True b. False Indicate whether the statement is true or false