The following list contains items that are related to aggregate demand and/or aggregate supply.1)Government Spending 2)Consumer Expectations 3)Degree of Excess capacity 4)Personal Income Tax Rates 5)Productivity 6)National Income Abroad 7)Business Taxes 8)Domestic Resource Availability 9)Price of Imported Products 10)Profit Expectations on Investments Refer to the above list. Changes in which of the above two factors would most likely cause a change in aggregate supply?
A. 1 and 5
B. 8 and 9
C. 5 and 7
D. 3 and 10
Answer: C
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A market demand curve can be constructed by
A) adding the prices all consumers will pay for any given quantity. B) adding the quantities that all consumers buy at each price. C) adding the quantities that a consumer buys at the highest price. D) None of the above answers is correct.
In the long run, all firms in a monopolistically competitive industry make
A) negative accounting profit. B) zero accounting profit. C) an economic profit. D) zero economic profit.
If the government is running a cyclically adjusted budget deficit, ________ fiscal policy is ________ because aggregate expenditure is increasing
A) discretionary; contractionary B) discretionary; expansionary C) expansionary; ineffective D) contractionary; appropriate
Firms need to know the shape of a demand curve to use marginal analysis.
Answer the following statement true (T) or false (F)