The aggregate-demand curve shows that an increase in the price level
a) decreases the real value of goods and services demanded in the economy.
b) decreases the dollar value of goods and services demanded in the economy.
c) increases the real value of goods and services demanded in the economy.
d) increases the dollar value of goods and services demanded in the economy.
Ans: a) decreases the real value of goods and services demanded in the economy.
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In Macroland, autonomous consumption equals 100, the marginal propensity to consume equals 0.75, net taxes are fixed at 40, investment is fixed at 50, government purchases are fixed at 150, and net exports are fixed at 20. Equilibrium output in this economy equals
A. $1,160. B. $1,440. C. $1,000. D. $1,280.
When the government imposes a tariff on imported goods, it _____________ prices for domestic consumers, ________________ consumers' surplus and _________________ the producers' surplus for domestic producers.
A. raises; lowers; raises B. lowers; raises; raises C. lowers; raises; lowers D. raises; lowers; lowers E. none of the above
If a rise in anticipated inflation produces for some reason a less-than-equal rise in the nominal interest rate, this ________ the costs of anticipated inflation by ________ saving
A) reduces, encouraging B) reduces, discouraging C) increases, encouraging D) increases, discouraging
The aggregate expenditure line is drawn on a graph that measures:
a. real GDP on the horizontal axis and aggregate expenditure on the vertical axis. b. aggregate expenditure on the horizontal axis and real GDP on the vertical axis. c. consumption on the horizontal axis and aggregate expenditure on the vertical axis. d. aggregate expenditure on the horizontal axis and consumption on the vertical axis. e. investment on the horizontal axis and aggregate expenditure on the vertical axis.