The aggregate demand curve shows
A. the relation between the aggregate quantity of goods demanded and the price level.
B. the relation between the real interest rate and output when the goods market clears.
C. the demand for goods depending on the relative price of goods compared to financial assets.
D. the amount of output that can be obtained given the current production function in the economy.
Answer: A
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The term “satisficing” indicates an optimal choice.
Answer the following statement true (T) or false (F)
Your student association is looking for an auditorium to rent for an all-day conference. The university's Performing Arts Center is vacant on that day, so the association wants to rent it
The physical plant manager tells you that the daily rent is $660, which includes $400 to cover part of the cost paid to build the Center, $40 to cover part of its regular maintenance cost, $50 to help pay for the building's insurance, $100 to cover the extra cost of electricity that the university would incur because of the conference, and $70 to pay for additional janitorial services for the conference. You know that no one else wants to rent the Center on that day and you think that the price that the manager charges is too high. But how much should you pay? Use the economic way of thinking to answer this question and to convince the manager to accept your offer: a) If you rent the Center, what will be the university's marginal cost of renting the center to you? b) If you rent the Center, what will be the university's marginal benefit of renting the center to you? c) What amount of rent should you offer? Convince the manager to accept your offer.
As a result of an expansionary monetary policy ________
a. both aggregate expenditure and aggregate demand increase b. both aggregate expenditure and aggregate demand decrease. c. aggregate expenditure increases and aggregate demand decreases. d. aggregate expenditure decreases and aggregate demand increases. e. aggregate expenditure remains unchanged; aggregate demand increases.
The infant industry argument says that
A. tariffs should be imposed to allow a new industry in a country to get established. B. imports should target new products from other countries to take advantage of the transmission of new ideas. C. dumping should be allowed in order to establish a presence of an industry that has previously not had a presence in another country. D. countries should produce and trade goods according to their comparative advantage.