Currently, the largest component of aggregate spending in the United States is ________.
A. government purchases
B. consumption
C. net exports
D. investment
Answer: B
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Holding nonmonetary assets and converting them to money when necessary is justifiable so long as
A) nonmonetary assets pay an interest rate above that available on money. B) nonmonetary assets pay an interest rate below that available on money. C) money, and not nonmonetary assets, are generally used in transactions. D) money and nonmonetary assets are both used as bartering items.
Demand applies to which of the following?
A) fast food B) criminal activity C) labor market D) all of the above
A movement from one point to an another point on the same consumption function could be caused due to
a. changes in wealth. b. an increase in the general price level. c. decrease in the real interest rates. d. changes in disposable income.
Which of the following statements is consistent with the rational expectations hypothesis?
A. When it comes to making personal economic decisions, people always behave in a rational manner. B. When it comes to making personal economic decisions, people rarely behave in a rational manner. C. Every person in the economy is always correct in her predictions about current and future policy changes. D. People combine the effects of past policy changes on important economic variables with their own judgment about the future effects of current and future policy changes.