When moving along a market demand curve, the prices of related goods are assumed to be constant. With an aggregate demand curve,
A. the assumption is meaningless because we are using a market basket for all goods and services.
B. the prices of related goods have an inverse relationship.
C. all goods are assumed to have the same price.
D. the same assumption holds true.
Answer: A
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If U.S. monetary authorities want to strengthen the dollar, they will
a. sell dollars in the foreign exchange market b. buy dollars in the foreign exchange market c. declare the dollar devalued d. sell dollars and buy only Euros in the foreign exchange market e. encourage other central bankers to sell dollars in the foreign exchange market
Are outstanding credit card balances counted as part of the money supply?
a. Yes; they are used to purchase things, and therefore, they are included in the money supply figures. b. No; money is an asset, while the credit card balances are a liability. Thus, they are not included in the money supply figures. c. Partly; credit card balances of $100 or less are included in the M1 money supply, but the money supply figures do not include balances in excess of $100. d. Partly; credit card balances are included in the M1 money supply, but not the M2 money supply.
Is faster economic growth unambiguously better?
a. No, because growth has an opportunity cost. b. No, because growth serves no useful purpose. c. Yes, because more goods and services are always better. d. Yes, because it expands the production possibilities of an economy. e. Uncertain-economic growth has no answer to this question.
Figure 4-16
In Figure 4-16, an increase in the number of producers will shift supply from
a.
S1 to S2.
b.
S2 to S1.
c.
S3 to S2.
d.
S3 to S1.