Why did John Maynard Keynes declare that aggregate demand was "inherently unstable"?
a. "Investment decisions were often guided by unpredictable animal spirits of business expectations."
b. "Aggregate demand was measured incorrectly for decades."
c. "Aggregate demand is not affected by any government action."
d. "An federal expansionary policy is not a proper tool for stimulating the economy."
a
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Refer to Table 17-3. What is the amount of revenue added as a result of hiring the fourth worker?
A) $7,200 B) $1,200 C) 90 microwaves D) 15 microwaves
If the marginal propensity to consume (MPC) is 0.75 and if policy makers wish to increase real GDP by $300 million to fight a recession, then by how much would taxes have to change?
a. -$30 million b. -$50 million c. -100 million d. -300 million
While waiting in line to buy two tacos at 80 cents each and a medium drink for 90 cents, Jordan notices that the restaurant has a value meal containing three tacos and a medium drink all for $3. For Jordan, the marginal cost of the third taco would be...
What will be an ideal response?
A decrease in the price level makes consumers feel wealthier, so they purchase more. This logic helps explain why the aggregate-demand curve
a) is vertical. b) slopes upward. c) is horizontal. d) slopes downward.