Without the government or the foreign sector in the income-expenditure model, consumption equals
A. planned aggregate expenditures minus planned investment.
B. planned aggregate expenditures plus planned investment.
C. planned aggregate expenditures plus actual investment.
D. planned aggregate expenditures minus inventory adjustment.
Answer: A
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A decrease in the demand for soft drinks due to changes in consumer tastes, accompanied by an increase in the supply of soft drinks as a result of reductions in input prices, will result in
A) a decrease in the equilibrium quantity of soft drinks and no change in the equilibrium price. B) a decrease in the equilibrium price of soft drinks; the equilibrium quantity may increase or decrease. C) an increase in the equilibrium quantity of soft drinks; the equilibrium price may increase or decrease. D) a decrease in the equilibrium price of soft drinks and no change in the equilibrium quantity.
According to the J curve, the rapid depreciation in the dollar from 1985 to 1987 caused net exports to
A) rise in the short run and fall in the long run. B) rise in the short run and rise further in the long run. C) fall in the short run and rise in the long run. D) fall in the short run and fall further in the long run.
Inventory is the
a. net change in inventories of final goods awaiting sale. b. net change in inventories of materials used in the production process. c. included in investment when calculating GDP. d. Both a and b. e. All of the above.
Which of the following statements best describes the outcome of a change in demand?
a. A change in the demand of a good never causes the demand curve for that good to shift. b. A change in the demand of a good never causes the demand or supply curve for that good to shift. c. A change in the demand of a good never causes the supply curve for that good to shift. d. A change in the demand of a good causes the demand and supply curves for that good to shift.