Answer the following statements true (T) or false (F)
1. The aggregate demand curve is the sum of individual demand curves in the economy.
2. Aggregate demand curves tend to be very flat.
3. Higher prices reduce the purchasing power of financial assets owned by households.
4. Net exports are excluded in the calculation of the national income.
5. As disposable income increases, the total amount of planned consumption increases.
1. FALSE
2. FALSE
3. TRUE
4. FALSE
5. TRUE
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Refer to Goods X and Y. If the indifference curves are horizontal, then we can conclude that
Assume that good X is on the horizontal axis and good Y is on the vertical axis in the consumer-choice diagram. PX denotes the price of good X, PY is the price of good Y, and I is the consumer's income. Unless otherwise stated, the consumer's preferences are assumed to satisfy the standard assumptions. a. X does not affect the individual’s utility. b. Y does not affect the individual’s utility. c. both X and Y affect the individual’s utility. d. neither good affects the individual’s utility.
?Suppose Sally allocates her budget between two goods, A and B. She spends her entire income on a combination of A and B, for which the ratio of marginal utility of good A to its price exceeds the ratio of marginal utility of good B to its price. She can increase her total utility by buying:
a. ?more B and less A. b. ?more A and less B. c. ?more B and more A. d. ?less B without changing her consumption of A. e. ?more A without changing her consumption of B.
Economics does not study correct or incorrect behaviors but rather it assumes that economic agents behave ________, meaning they make the best decisions given their knowledge of the costs and benefits
A) equitably B) rationally C) emotionally D) selfishly
There is easy entry into the ________ and ________ industries.
A. oligopolistic; monopolistic B. monopolistic; perfectly competitive C. perfectly competitive; monopolistically competitive D. monopolistically competitive; oligopolistic