In the Classical model, aggregate demand determines the
A) level of real output.
B) the level of employment.
C) the price level.
D) the velocity of money.
C
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To find its profit-maximizing output level, a firm should operate where
A. AVC = MC. B. MC = MR. C. TFC = TVC. D. AFC = AVC.
If the demand for a good is relatively inelastic, this means that consumer purchases of the good are
a. not very sensitive to the price of the good. b. highly sensitive to the price of the good. c. unrelated to the price of the good. d. unaffected by changes in the income level of consumers.
Suppose the market supply curve is p = 5 + Q. At a price of 10, producer surplus equals
A) 50. B) 25. C) 12.50. D) 10.
Table 7-5 Stereos produced 0 1 2 3 4 5 6 Total cost (in $) 200 325 410 475 550 660 825 Table 7-5 shows short-run total cost figures for a stereo manufacturer. At what output level does short-run average total cost reach a minimum?
A. 2 B. 3 C. 4 D. 5