The aggregate demand and aggregate supply graph has
a. the price level on the horizontal axis. The price level can be measured by the GDP deflator.
b. the price level on the horizontal axis. The price level can be measured by real GDP.
c. the price level on the vertical axis. The price level can be measured by the GDP deflator.
d. the price level on the vertical axis. The price level can be measured by GDP.
c
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Which of the following is NOT true of a demand curve?
A. It reflects sellers' reservations prices. B. It shows the amount consumers want to buy at various prices. C. It has negative slope. D. It relates the price of an item to the quantity demanded of that item.
If the Fed conducts a contractionary monetary policy, ________
A) the nominal interest rate will decrease B) demand for labor will increase C) banks will make fewer loans D) bank deposits will increase
In order to increase economic growth, a government can
A) discourage research and development. B) decrease funding on education. C) discourage specialization and trade. D) establish property rights and a legal system. E) tax saving in order to encourage more spending.
If assets are imperfect substitutes, then a decrease in the amount of domestic currency bonds held by the public will ________ the risk premium and ________ the amount of domestic currency bonds held by the central bank
A) decrease; leave unchanged B) increase; decrease C) increase; increase D) decrease; decrease E) leave unchanged; decrease