Refer to Figure 6.1. Assume that L1 represents the budget line before a price change. Point C represents the:
A. uncompensated effect on an increase in the price of soup.
B. compensated effect on a decrease in the price of soup.
C. uncompensated effect on a decrease in the price of soup.
D. compensated effect on an increase in the price of soup.
D. compensated effect on an increase in the price of soup.
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The government might engage in expansionary fiscal policy if it wanted to
A) shift the aggregate demand curve to the left. B) reduce the level of unemployment. C) reduce real GDP. D) reduce the price level.
Most of the money income that Americans receive annually derives from ownership of
A) interest-bearing bank accounts. B) personal attributes. C) political influence. D) real estate. E) stocks and bonds.
The aggregate demand curve:
a. shows the level of real GDP purchased in the economy at different possible price levels during a period of time. b. shows the level of real GDP produced in the economy at different possible price levels during a period of time. c. shifts to the left whenever there is an increase in aggregate expenditures. d. slopes upward.
If buyers expected the future price of a good to decrease, it would tend to increase the current quantity exchanged
a. True b. False Indicate whether the statement is true or false