Aggregate demand is about _________ and aggregate supply is about _________.
Fill in the blank(s) with the appropriate word(s).
spending; production
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Explain what a proportional tax is and provide an example
What will be an ideal response?
That part of disposable income not spent on consumption is:
a. saved. b. invested. c. wasted. d. borrowed.
The original comparative advantage model that used the relative abundance of factors of production to explain comparative advantage assumed that countries:
a. employed all four factors of production; land, labor, capital, and entrepreneurship. b. employed only two factors of production; labor and capital. c. employed only two factors of production; land and entrepreneurial ability. d. worked with a fixed capital stock. e. were free to vary their employment of only one factor of production; labor.
Answer the following statements true (T) or false (F)
1. The Keynesian analysis assumes that ample resources will be available to increase production if planned investment increases when the economy is at less than full employment. 2. The Keynesian analysis differs from classical analysis in its short-run analysis of the economy. 3. The monetarist school is primarily concerned with unemployment and recessions. 4. The monetarist school is more similar to the Keynesian school than the classical school. 5. The time lags lead monetarists to contend that monetary policy is counterproductive. 6. The new classical school holds that rational expectations tend to defeat the goals of monetary policy. 7. The new classical school contends that government fiscal policy is better than monetary policy in controlling inflation.