Among the components of a 45-degree (or income) line are consumption and
a. investment
b. inventories
c. exports
d. saving
e. imports
D
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In the classical model, what is the result of an increase in aggregate demand?
A) The price level increases, and real GDP remains constant. B) The price level decreases, and real GDP remains constant. C) Real GDP increases, and the price level remains constant. D) Real GDP decreases, and the price level remains constant.
The rate of interest written on a contract between a borrower and a lender is the
A. nominal interest rate. B. real interest rate. C. implied interest rate. D. expected interest rate.
Suppose that the income tax in the United States was such that all households had to pay 20 percent of their income to the government as taxes. This tax is an example of
A) a regressive tax. B) a proportional tax. C) a progressive tax. D) an efficient tax.
Which of the following equations defines marginal revenue product?
A. MRP = P times Q. B. MRP = total cost. C. MRP = total revenue minus total cost. D. MRP = MPP times price of the product.