The horizontal axis of the aggregate demand and aggregate supply graph has the
a) the price level as measured by the CPI.
b) unemployment rate.
c) the price level as measured by the GDP deflator.
d) output of goods and services.
Ans: d) output of goods and services.
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When the price level is low and the demand for domestic goods increases, how does it affect international trade?
A) Prices of all international goods will increase. B) Prices of all international goods will decrease. C) Net exports will decrease. D) Net exports will increase.
Among the groundbreaking contributions to economics made by John Maynard Keynes is
A) the insight that recessions can result from a lack of aggregate demand. B) the development of the spending multiplier. C) the theory of sticky wages and prices. D) all of the above
Which of the following statements about economic resources is true?
A) Economic resources include financial capital and money. B) All economic resources are man-made. C) Economic resources are also called factors of production. D) Economic resources are used only by businesses.
Opportunity costs arise due to
a. Resource scarcity b. Interest rates c. Limited wants d. Preferences