If government spending were to increase we expect that the aggregate demand curve will:
A. shift to the right.
B. remain unchanged but the economy will move down along the curve to a higher quantity.
C. remain unchanged but the economy will move down along the curve to a lower quantity.
D. shift straight down.
Answer: A
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A rise in the price of a product lowers the total revenue from the product if the
A) income elasticity of demand exceeds 1. B) good is an inferior product. C) demand for the product is inelastic. D) demand for the product is elastic.
For a typical person who is currently earning a low wage rate, the
a. substitution effect of a wage rate increase usually is stronger than the income effect b. substitution effect of a wage rate increase usually is weaker than the income effect c. income effect of a wage rate increase is usually zero d. substitution effect of a wage rate increase is usually zero e. substitution and income effects of a wage rate increase tend to work in the same direction
Explain why the LDCs are unable to invest much in capital goods and human capital
If there is a surplus in the market for loanable funds, then the interest rate
a. rises, so national saving rises. b. rises, so national saving falls. c. falls, so national saving rises. d. falls, so national saving falls.