Refer to the accompanying figure.
Starting from long-run equilibrium at point C, an increase in government spending that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ creating ________ gap.
A. A; a recessionary
B. B; no output
C. B; expansionary
D. D; an expansionary
Answer: D
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To measure GDP using the expenditure approach you must collect data on
A) inflation. B) exports. C) wages. D) saving.
Which of the following is a definition of the consumption function?
a. A functional relationship between real consumption spending and real disposable income b. A functional relationship between real consumption spending and the interest rate c. A functional relationship between real consumption spending and wealth d. A functional relationship between real consumption spending and total spending e. A functional relationship between real consumption spending and net taxes
What is a term referring to a table that shows the quantity supplied at a range of different prices?
a. demand curve b. demand schedule c. supply curve d. supply schedule
A rise in input prices of oil, which affects many or most firms across the economy, can cause the aggregate supply curve to______________.
a. shift b. incline c. decline d. flatten