Because reducing both unemployment and inflation simultaneously are conflicting goals:
A. aggregate demand policy will allow policymakers to achieve both objectives, but only if it is contractionary.
B. aggregate demand policy will allow policymakers to achieve one of these objectives, but not both.
C. there is a policy that will allow policymakers to achieve either objective.
D. aggregate demand policy will allow policymakers to achieve both objectives, but only if it is expansionary.
Answer: B
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Moving from one point on the production possibilities frontier to another ________
A) involves a tradeoff but does not incur an opportunity cost B) involves an opportunity cost but no tradeoff C) involves a tradeoff and incurs an opportunity cost D) involves no tradeoff but it does incur an opportunity cost
The aggregate demand curve shows total expenditures at different levels of national income
Indicate whether the statement is true or false
The switch to the use of ethanol in gasoline is driven primarily by its relatively lower price. Assuming a competitive market, what effect would this change have on the equilibrium price and output for gasoline?
A) Price rises, output falls. B) Price falls, output rises. C) Price rises, output rises. D) Price falls, output falls.
For a normal good, quantity demanded
a. increases as income rises, so the income elasticity of demand is positive b. increases as income rises, so the income elasticity of demand is negative c. falls as income rises, so the income elasticity of demand is positive d. falls as income rises, so the income elasticity of demand is negative e. remains unchanged as income rises, so the income elasticity of demand is zero