How can price stickiness be used to categorize macroeconomic models?
What will be an ideal response?
Macroeconomic models can be categorized based on price stickiness. In the very short run, prices are almost totally inflexible and any change in demand results in a change in output or employment. Prices become more flexible over time and changes in demand generate little changes in output and employment. The change in the flexibility of prices allows for short-run macroeconomic models to assume that prices are inflexible or “sticky” while long-run macroeconomic models assume fully flexible prices.
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In 2014, net exports in the United States were
A) zero. B) positive. C) negative. D) greater than personal consumption expenditures.
A firm in a perfectly competitive market maximizes profits when it finds
A) the price at which total revenue minus total cost is the greatest. B) the quantity at which total revenue minus total cost is the greatest. C) the quantity at which total revenue equals total cost. D) the quantity at which total revenue is maximized.
If autonomous investment decreases by $60 billion, equilibrium real GDP demanded will
What will be an ideal response?
The money demand curve shifts to the right when
a. there is an increase in the riskiness of interest-bearing assets. b. there is a decrease in the interest rate. c. income decreases. d. income increases. e. both a and d.