In the classical model, what is the impact of changes in the demand for goods and services on aggregate output? Do they affect any real variables?
What will be an ideal response?
Factors such as the quantity of money, the level of government spending, and the level of demand for investment goods by the business sector are all demand-side factors and have no role in determining output and employment. Also, changes in taxes, to the degree that they affect the demand side, will neither affect output nor employment. The level of aggregate demand has no effect on output because output and employment are supply-determined.
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The lag between changes in the Fed's interest rate target and large responses of output means that the Fed may want to ________ interest rates ________ output recovers to its natural level
A) raise, after B) lower, before C) raise, before D) lower, after
A price ceiling that is set below the equilibrium price
A) causes suppliers to raise their prices. B) is binding. C) is non-binding. D) creates a surplus.
Economic growth is:
A. about the quality of life for all sectors of society. B. an indicator of individual poverty. C. a measurement of available resources. D. the measure of changes in real GDP.
The above figure shows the marginal private benefit and marginal social cost of a college education. If students receive a $10,000 voucher
A) no students will go to college. B) less than 10 million students will go to college. C) 10 million students will go to college. D) more than 10 million students will go to college.