The Keynesian model of aggregate demand includes:
I. government purchases and taxes.
II. consumer spending and investment spending.
III. exports plus imports.
a. I
b. I and II
c. II and III
d. I, II, and III
Ans: d. I, II, and III
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The table above gives the demand schedule for peas. Between point A and point B, the price elasticity of demand equals
A) 0.11. B) 0.50. C) 0.22. D) 9.09.
Assuming perfect capital mobility and flexible exchange rates, then
a. monetary policy is ineffective while fiscal policy is highly effective. b. fiscal policy is completely ineffective while monetary policy is highly effective. c. both monetary policy and fiscal policy are effective. d. monetary policy is less effective than fiscal policy.
Fixed costs and overhead are identical
Indicate whether the statement is true or false
In a floating exchange rate system, the capital account balance equals the negative of the current account balance.
Answer the following statement true (T) or false (F)