Which one of the following is TRUE?
A. The intersection of aggregate demand and aggregate supply identifies an equilibrium level of employment and an equilibrium level of investment.
B. The intersection of aggregate demand and aggregate supply identifies an equilibrium interest rate and an equilibrium level of exports.
C. The intersection of aggregate demand and aggregate supply identifies an equilibrium price level and an equilibrium level of real GDP.
D. The intersection of aggregate demand and aggregate supply identifies an equilibrium interest rate and an equilibrium wage level.
Answer: C
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If households save $0.40 of each additional dollar of increased income and spend the rest, the expenditure multiplier will be
A) 1.67. B) 2.5. C) 4. D) 6.
An increase in the real risk free interest rate causes its:
a. Aggregate demand to fall, the average price level to fall, and real GDP to rise. b. Aggregate supply to rise, the average price level to rise, and real GDP to rise. c. Aggregate demand to rise, the average price level to rise, and real GDP to rise. d. Aggregate supply to fall, the average price level to rise, and real GDP to fall. e. Aggregate demand to fall, the average price level to fall, and real GDP to fall.
Economic indicators, like unemployment claims and the average workweek, which change before real GDP changes, are called _____________ economicindicators.
A. leading. B. lagging. C. coincident. D. structural.
Which of the following sets of terms describes the problem of scarcity in economics?
A. goods, land, and needs B. choices, opportunity costs, and trade-offs C. labor, needs, and opportunity costs D. production, consumption, and wants