Drawing demand and supply curves assume that the primary variable influencing decisions to produce and purchase goods is:
A. Price
B. Expectations
C. Preferences
D. Incomes
Answer: A. Price
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The Keynesian framework indicates that government can play an important role in determining aggregate output by
A) changing the level of government spending or taxes. B) raising consumer confidence. C) raising investor confidence. D) changing the money supply and interest rates.
Which of the following is true in the long run? a. The aggregate demand curve determines the level of potential output
b. The long-run aggregate supply curve is horizontal. c. The actual price level and the expected price level are equal. d. Cyclical unemployment is between 5 percent and 6 percent. e. The price level is determined entirely by the long-run aggregate supply curve.
The primary reason we think of inflation as bad even when wages rise with it is that it:
What will be an ideal response?
Which statement is false?
A. The firm's short-run supply curve runs along the MC curve from the shutdown point to the break-even point. B. The MC curve intersects the ATC curve at the latter's minimum point. C. Total revenue = price x output sold. D. None of these statements are false.