In the AS/AD model, the repercussion that a change in aggregate quantity demanded has on production and subsequently on income and expenditures is called the:
A. expenditure effect.
B. money wealth effect.
C. accelerator effect.
D. multiplier effect.
Answer: D
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Economists use the phrase, "dollar bills left on the sidewalk" for describing systematically missed opportunities
Indicate whether the statement is true or false
The main examples of macroeconomic coordination failures are
a. profit declines. b. relative price changes. c. recessions and depressions. d. consumer taste changes.
Refer to the above diagram. At output level Q average fixed cost:
A. is equal to QE. B. is equal to EF. C. is measured by both QF and ED. D. cannot be determined from the information given.
Which of the following accurately contrasts AD2 and AD3?
a. AD2 shows an increase in price level; AD3 shows a decrease in price level.
b. AD2 shows a decrease in price level; AD3 shows an increase in price level.
c. AD2 shows an increase in real GDP demanded; AD3 shows a decrease in real GDP demanded.
d. AD2 shows a decrease in real GDP demanded; AD3 shows an increase in real GDP demanded.