Explain the determinants of aggregate private spending
What will be an ideal response?
Aggregate private spending, A, equals C plus I. So, A is a function of current income, future expected income, current taxes, future expected taxes, current interest rates, and future expected interest rates.
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Which of the following statements about the perfect competitor is INCORRECT?
A) The perfectly competitive firm is always a price taker. B) The perfect competitor sells a homogeneous commodity. C) If an individual firm raises price, it will lose business. D) The products made by a perfectly competitive firm have no close substitutes.
The price of a tablet increased from $250 to $400 while the price of a tablet app increased from $1 to $2. The relative price of tablets in terms of tablet apps
A. increased from 175 to 350. B. increased from 0.003 to 0.05. C. decreased from 250 to 200. D. decreased from 0.35 to 0.2.
________: the slope of the aggregate consumption function
Fill in the blank(s) with correct word
A(n) ________ is represented by a leftward shift of the demand curve while a(n) ________ is represented by a movement along a given demand curve
A) decrease in demand; increase in demand B) decrease in demand; increase in quantity demanded C) increase in demand; decrease in quantity demanded D) decrease in quantity demanded; decrease in demand